London pre-open: Stocks seen up as Turkey fears ease, jobs data eyed

London stocks were set to rise at the open on Tuesday as worries about the Turkish crisis eased, with investors looking ahead to the latest UK jobs data.

The FTSE 100 was called to open 17 points higher at 7,659.

London Capital Group analyst Jasper Lawler said: "Fears of contagion of the Turkish Lira crisis appeared to be contained overnight, allowing Asian markets to catch their footing despite a sell off on Wall Street. After Turkey’s currency crisis shook the markets on Monday, Asian indices moved broadly higher and European markets point to a stronger start on the opening bell.

"The selloff in the Turkish Lira and the knock-on effects to other currencies and asset classes will continue to attract attention through today’s session. However, a fuller economic calendar will also provide traders with a distraction."

Jobs data will be the main focus in the UK, with the ILO unemployment rate, average earnings and claimant count all due at 0930 BST.

Unemployment is forecast to remain constant at multi-decade lows of 4.2% in June, Lawler said.

"Looking further behind recent figures, there have been employment gains of 160,000 on average over the last three months; an impressive number particularly given the uncertainties presented by Brexit. The fact that the labour market has managed to continue generating employment was one of the key factors behind the BoE interest rate hike in early August.

"Whilst employment gains are expected to be in the region of 100,000, a decline from previous months, this would still be considered a solid generation of jobs and keep the pound happy. Looking at average earnings, both including and excluding bonuses no changes are forecast with growth expected to remain at 2.5% and 2.7% respectively."

In corporate news, Esure said it has agreed to be bought by private equity firm Bain Capital for 280p a share in cash, as it posted a drop in first-half pre-tax profit, partly on the back of adverse weather-related claims costs.

Chairman Peter Wood said: "I'm pleased to be announcing this transaction today, because it is a great outcome for shareholders, for the company, and for customers.

"As a private company and with Bain Capital's backing, Esure will be able to invest behind the innovation required to fully realise the opportunities in this market. I am pleased to be continuing as Chairman and am fully aligned with Bain Capital, who I believe will be a tremendous partner in the next phase of Esure's journey."

Ofcom has fined Royal Mail £50m for a "serious breach" of competition law, after finding that the company "abused its dominant position" in the letter delivery market.

Royal Mail said it will appeal the decision, arguing that the Ofcom's objection to its price increase in the bulk letters market announced in 2014, was never implemented or paid and "considers that the decision is without merit and fundamentally flawed".

Lower sales tonnages and copper grades hit interim profits at Antofagasta although the miner said it expected a better second half.

Pre-tax profits fell by 32.4% to $465.6m, while underlying profits fell 16.2% to $904.2m on revenue up 3.6% to $2.12bn as higher realised prices offset lower copper sales volumes.

Group copper production and net cash cost guidance for the full year was unchanged at 705-740,000 tonnes at $1.35/lb as grades continue to improve over the rest of the year.

Plastic piping and ventilation systems manufacturer Polypipe Group issued its unaudited interim results for the six months ended 30 June on Tuesday, saying it ended the period in line with expectations, with revenue ahead 0.1% at £210.2m.

The company said its underlying operating profit fell 4.2% year-on-year to £36.3m, while its underlying operating margin was 17.3% - down 70 basis points. Polypipe’s management said it remained “confident” of delivering its full year expectations.