London pre-open: Stocks seen lower as pound underpinned by Brexit hopes
London stocks were set to fall at the open on Wednesday, with a strong pound likely to weigh on the top-flight index amid growing hopes that a Brexit deal can be agreed, as investors eyed key UK inflation data.
The FTSE 100 was called to open 18 points lower at 7,193. Meanwhile, the pound was down 0.1% against the dollar at 1.2778, having surged to its highest level against the greenback since May on Tuesday on hopes of a Brexit deal.
EU and UK officials are set to resume Brexit talks ahead of a summit of EU leaders on Thursday, amid reports that a deal could be imminent. Downing Street said after discussions ended on Tuesday that they had been "constructive" but there was still "more work to do".
CMC Markets analyst Michael Hewson said: "With a deal so close and the EU summit this week, a lack of an agreeable text by today, could well mean that we get an extra summit next week in order that the necessary paperwork is finalised in time for the 31st October deadline.
"Even if it isn’t it remains highly possible that a short extension could be granted in order to push a deal across the line."
On the data front, the retail price index, consumer price index and producer price index are all due at 0930 BST.
In corporate news, higher Chinese demand helped mining giant Rio Tinto report a 5% rise in third-quarter iron ore shipments.
The company maintained its full year iron ore shipment forecast of 320m to 330m tonnes.
Segro said a strong third quarter saw it sign contracts worth £15.3m of new headline rent, taking the total for the nine months to 30 September to £48.6m, though this was below the £52.0m worth of new agreements signed in the same period in 2018.
The British real estate investment trust remained confident in its prospects despite an uncertain macroeconomic backdrop, with its rent roll from existing space having increased by £10.6m so far this calendar year.