London pre-open: Stocks seen higher as investors eye stress test results
London stocks were set for a firmer open on Wednesday, taking their cue from positive US and Asian sessions as investors continue to eye Sino-US relations and Brexit-related headlines.
The FTSE 100 was called to open 30 points higher at 7,046.
"Despite starting the day in the red, the Dow closed higher overnight, after White House advisor Larry Kudlow sought to bring a glimmer of hope to prospects of de-escalating trade tensions. His comments come following a more pessimistic tone from Trump earlier in the week," said London Capital Group analyst Jasper Lawler.
"Contradicting trade headlines are injecting volatility into the market ahead of the G20 meeting later this week. The markets are pinning their hopes on the summit and side-line meetings between President Xi and Trump, as the last opportunity this year to move trade talks forward.
"Asian markets didn’t need to be told twice that Larry Kudlow considers a trade deal between the US and China an open possibility. Asian stocks powered higher as risk on dominated. Flows out of safe haven currency, the Japanese yen continued."
Banks are likely to be in focus ahead of the Bank of England's stress test results, which are now due to be released at 1630 GMT rather than 0700 GMT as originally planned.
"Changes to the release of the stress test results will naturally heighten anticipation surrounding the results. With Brexit and very possibly a no deal Brexit looming on the horizon, people will be paying more attention to this stress test than previous ones," said Lawler.
"Brexit survival aside, the bottom line is that investors will be looking at the stress test results as an early indication of each bank’s ability to return capital to shareholders by ways of higher dividends and share buyback programmes."
In corporate news, IT services company Softcat said first quarter customer demand had remained strong across all segments, helping to deliver year-on-year growth in revenue, gross profit and operating profit without specifying numbers.
“Our second quarter has started well and I'm confident we will meet the Board's expectations for the year," it added in a trading statement.
Experian's agreed takeover of start-up credit scoring rival Clearscore could be blocked by UK competition authorities.
An investigation by the Competition and Markets Authority has found that the deal is "likely to result in less intense competition" and potentially harming digital developments in the personal finance market.