London pre-open: Stocks set for steady start as investors eye US-China
London stocks were set for a steady open on Thursday as investors continue to eye any trade developments between the US and China.
The FTSE 100 was called to open three points lower at 7,185, having ended in the green on Wednesday after a Bloomberg report suggested that the US and China were edging closer to a phase one agreement.
"Ultimately, we’ll only know what the true state of play is as we get closer to 15th December and the decision on the implementation of tariffs on the remaining $150bn of Chinese goods," said CMC Markets analyst Michael Hewson.
On home shores, sterling was up 0.2% against the dollar at 1.3125 and 0.1% higher versus the euro at 1.1844 after rallying sharply in the previous session amid expectations of a Tory win in next week's general election.
Hewson said: "The pound broke to the upside yesterday, as President Trump came and went while managing to avoid courting controversy over the NHS, and by virtue of that putting Boris Johnson in a difficult spot.
"As a result of that currency markets appear to be starting to price out the prospect that Labour might win a majority at next week’s election. Having been so negative on the pound for so long, markets are starting to believe in the prospect that we could well start to see the prospect of an orderly withdrawal from the EU in the next two months, and thus short positions are starting to get squeezed out, sending the currency to its best levels against the euro since before the 2017 election."
In corporate news, Grainger, the UK's largest listed provider of private rental homes, said it had agreed to forward fund and buy a 307 home development in Cardiff for £57m.
The company on Thursday said it expected the investment to generate a gross yield on cost approaching 7% once stabilised, with completion anticipated in mid-2022.
Dunelm said it now anticipated full year profits would be be higher than expectations, after the successful transition of all of its customers to a new digital platform.
The British homeware retailer added that it maintained good sales growth during the transition period, while gross margins were stronger than expected after sourcing gains and better sell through.
Wholesale power generator ContourGlobal said it expected full year core earnings to be below guidance after a delay in closing the deal on its Mexico acquisition.
The company had previously guided earnings before interest, tax, depreciation and amortisation to be in the lower half of a $720m - $770m range.