London pre-open: Stocks seen higher on Covid vaccine hopes
London stocks were set to rise at the open on Wednesday, taking their cue from a positive session on Wall Street amid optimism over a coronavirus vaccine.
The FTSE 100 was called to open 53 points higher at 6,232.
CMC Markets analyst David Madden said: "Moderna, a pharmaceutical company, announced that its potential Covid-19 vaccine delivered a robust immune response in an early stage human trial, and that has helped wider market sentiment. European indices are called higher."
Investors will also be digesting the latest UK inflation data, which showed that consumer price inflation rose to 0.6% in June from 0.5% in May, coming in above consensus expectations of 0.4%. Meanwhile, core inflation increased to 1.4% from 1.2%, versus expectations for no change.
In corporate news, luxury fashion brand Burberry said it expected first half sales to fall by up to 50% as the coronavirus pandemic continued to have a material impact.
The company said first quarter comparable sales plunged 45% to £257m with stores closed during global lockdowns, although the rate eased to -20% in June with growth in mainline China and Korea ahead of pre-Covid levels.
“Based on this trading assumption, we would expect H1 2021 gross margin to decline by around 200 basis points to 300bps year-on-year and … operating expenses to reduce by a mid-teens percentage compared to last year,” it said.
Severn Trent said the first quarter was in line with its expectations and predicted annual performance would be in line with guidance.
The water company said it had not seen evidence to change its estimates for the impact of Covid-19.