London pre-open: Stocks to rise on solid Wall St cues; EU summit eyed
By Michele Maatouk
Date: Wednesday 17 Oct 2018
(Sharecast News) - London stocks were set to rise at the open on Wednesday, taking their cue from a strong session on Wall Street, as investors eyed the release of key UK inflation data and the EU summit in Brussels.
The FTSE 100 was called to open 27 points higher at 7,086 following impressive gains in the US, where well-received earnings from the likes of Goldman Sachs, Morgan Stanley and Johnson & Johnson underpinned the tone.
An impressive set of results from Netflix was also expected to boost sentiment in European trade, as its shares surged in after-hours trading after the company topped third-quarter estimates for subscriber growth and earnings.
Meanwhile, Brexit was very much in focus as Prime Minister Theresa May headed to Brussels for the EU summit later as the UK and the EU struggle to agree over the issue of the Irish border.
CMC Markets analyst Michael Hewson said: "For a long time last week the pound found some support from the belief that we might start to see the outlines of a Brexit deal, by the time we got to today's EU council meeting which is due to convene in Brussels later today.
"Markets were quickly disabused of this notion late on Sunday night, which quickly prompted a rather brief slide, and while the tone from politicians from the EU side has become much more pessimistic with European Council President Donald Tusk stating that there were no grounds for optimism around today's meeting, and that it was up to the UK to come up with new solutions."
On the data front, the retail price, producer price and consumer price indices are due at 0930 BST.
In corporate news, Pearson said it remained on track to hit full year profit targets and that earnings per share would be boosted by a one-off tax benefit.
The education provider previously expected its adjusted effective tax rate to be 20% but on Wednesday said it now was likely to receive a credit of 5-7%.
BHP Billiton said strong Chinese demand helped to boost first-quarter iron ore production, but cut 2019 copper production forecasts by 3% to 1.62m - 1.71m tonnes, citing reduced production at its Spence and Olympic Dam mines in Chile and Australia, respectively.
Segro updated the market on its trading on Wednesday, for the period from 1 July to 16 October, reporting £12.6m of new headline rent during the third quarter - rising from £8.8m year-on-year - including £4.2m in rent from existing space.
The company said total contracted headline rent for the nine months to 30 September was £52m, 43% ahead of a strong prior year comparator
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