London pre-open: Stocks to drop amid Brexit worries
London stocks were set for a weaker open on Wednesday, tracking losses in the US and Asia amid worries about trade relations between the US and China and concerns about Brexit.
The FTSE 100 was called to open 62 points lower at 6,960. Meanwhile, the pound was down 0.3% against the dollar at 1.2686 and 0.1% weaker versus the euro at 1.1200, having fallen to its lowest level this year against the US dollar after the UK government lost three parliamentary votes, including two contempt of Parliament motions for not publishing the full legal advice on the withdrawal agreement.
"The government was also defeated on a motion where MPs forced the government to consult them on next steps should next week’s Commons vote see the withdrawal agreement rejected by parliament," noted CMC Markets analyst Michael Hewson.
"This move more or less takes the prospect of a “no deal” off the table, and that’s even before you consider yesterday’s opinion from the European Court of Justice’s Advocate General that the UK could unilaterally revoke its article 50 notification.
"If this is confirmed by the European Court of Justice in a ruling in the coming weeks, it will reinforce the hands of those who want the UK parliament to overturn the referendum result and stay in the EU. What that would mean for the ongoing political discourse one can only imagine, but it could well poison politics for a generation if it were to happen."
On the data front, Markit's services PMI for November is at 0930 GMT.
In corporate news, Wood Group said it had been awarded a $43m contract by an unnamed large-cap midstream company to construct 80 miles of steel pipeline in west Texas.
The project will serve to transport natural gas liquids across Texas. At peak construction, the project is anticipated to employ 200 people, Wood said.
Riverstone Energy said it had sold 100% of its membership interests in Mexico-focused Sierra Oil & Gas to DEA Deutsche Erdoel for an undisclosed sum.
Stagecoach Group issued its interim results for the half-year ended 27 October on Wednesday, reporting adjusted earnings per share of 12.9p, down from 13.6p but still ahead of expectations, as the prior year included a strong contribution from the now-defunct South West Trains franchise.
The FTSE 250 passenger transport operator swung to a statutory loss per share of 5.5p, from earnings of 13.6p, with the board maintaining the interim dividend at 3.8p per share.
Civitas Social Housing has assured that the recent declaration that one of its main tenants has been declared non-compliant by the social housing regulator is "unlikely" to be detrimental to the company's net asset value.
In a summary regulatory judgement, the Regulator of Social Housing gave Westmoreland Supported Housing, which represents 22.6% of the NAV of the Civitas portfolio, non-compliant ratings for governance and financial viability.