London pre-open: Stocks to nudge lower as investors keep an eye on sterling

London stocks were set to nudge lower at the open on Thursday, with investors likely to keep an eye on the pound after its surge against the dollar in the previous session weighed on the top-flight index.

The FTSE 100 was expected to open six points lower at 7,637.

London Capital Group analyst Jasper Lawler said: “GBP/USD has been a standout winner, as a combination of pound strength and dollar weakness meant the pound could continue its recovery back to levels not seen since before the Brexit referendum.

“GBP/USD jumped 1.6%, its biggest one-day gain in nine months, to close comfortably above $1.42 handle, before surging on to test $1.43 in Asia overnight. Speculative interest to see the pair target $1.45 in the coming sessions, should the current climate persist. Any pullbacks are likely to be considered buying opportunities.”

On the data front, BBA mortgage approvals are at 0930 GMT while the CBI distributive trades survey is at 1100 GMT. The European Central Bank rate decision at 1245 GMT will also be in focus.

In corporate news, mining giant Anglo American said fourth quarter diamond production at its De Beers unit increased by 5% supported by stronger trading conditions.

Copper production increased marginally to 148,600 tonnes with its Collahuasi operation achieving record production in the year, driven by continued strong plant performance and higher grades, Anglo said.

Platinum production fell by 4% and palladium 5% after a decision in third quarter to remove unprofitable ounces by placing the Bokoni mine on care and maintenance. The Mogalakwena mine delivered a record production year driven by further productivity improvements.

Guinness and Scotch whisky maker Diageo toasted stronger first half sales and profit margins as weakness in Asia Pacific was quashed by growth in all other regions.

Reported net sales of £6.5bn in the six months ended 31 December were 1.7% higher than the same period the year before, while operating profit of £2.2bn was 6.1% higher.

Amid an ongoing takeover bid from 21st Century Fox, Sky reported a 5% increase in like-for-like revenue in its first half on Thursday, to £6.7bn.

The company said established business EBITDA was ahead 15% in the six months to 31 December, to £1.2bn, while there was a 10% increase in EBITDA overall to £1.1bn,

Earnings per share advanced 11% to 31.3p, the board confirmed.