London pre-open: Stocks seen flat as investors continue to mull Trump policies
London stocks were set for a muted open on Tuesday, with investors still cautious about Donald Trump’s latest policy decisions.
The FTSE 100 was expected to open three points lower than Monday’s close at 7,115.
Oanda’s Craig Erlam said: “Traders appear to still be operating with caution as Donald Trump’s actions draw focus to the less market friendly aspects of his campaign that investors until now have overlooked.
“Trump noted on Monday just how well the markets have performed since his election victory back in November but in that time, there has been a strong focus on his promises of fiscal stimulus, deregulation and tax cuts, all of which are supportive for markets. His actions over the last few days are another reminder that there were two sides to his campaign and Trump is just as adamant to follow through on those measures that will likely weigh on market sentiment in the coming months.”
In Asia, the Bank of Japan stood pat on interest rates at -0.1%, as widely expected, and maintained the bank's target of raising the amount of outstanding Japan government bond holdings at an annual pace of about JPY80 trillion. The BoJ lifted its forecasts for the economy but left its forecasts for inflation unchanged.
Investors will also be digesting the latest survey from market research firm GfK, which showed that the confidence of UK consumers improved month-on-month in January.
The GfK consumer confidence index printed at -5 for the first month of the year, up two points from the previous month’s reading and surpassing analysts’ expectations of -8.
On the corporate front, in an update on third quarter trading, energy company SSE confirmed it still expected to increase its dividend by at least the same rate as inflation this year and in the future.
For the nine months to 31 December, energy consumption was higher due to the weather but the period saw volatile wholesale energy market conditions and relatively dry and still weather during November and December that led to low output of renewable energy.
Water and wastewater company Severn Trent released a trading update for the three months to 31 December, saying that after a “strong operational performance” in the third quarter, it now expected net customer outcome delivery incentive rewards for the full-year 2016-17 to be ahead of previous guidance of £15m.
The group did caution that there remained two “unpredictable” winter months ahead, though it did anticipate at least meeting or exceeding the level achieved last year, which was £23.2m.
Property management firm British Land’s Mayfair commercial development is 83% let, just four months after its launch in September 2016.
The 100 company’s 51,000 square feet office space at 7 Clarges Street is 83% let after securing terms with Capula Investment, Quantum Pacific and Fortress Investment Group.
UK net lending, consumer credit and mortgage approvals are at 0930 GMT.