London pre-open: Stocks to drop as May faces cabinet showdown over Brexit deal
By Michele Maatouk
Date: Wednesday 14 Nov 2018
(Sharecast News) - London stocks were set to fall at the open on Wednesday following a downbeat session on Wall Street, with Brexit firmly in focus after Theresa May agreed the text of a draft withdrawal agreement with the EU.
The FTSE 100 was called to open 27 points lower at 7,026 as May faced a cabinet showdown over her Brexit deal.
The PM has called a meeting of senior ministers at Downing Street at 1400 GMT to approve the draft agreement.
"For all the talk of a deal between EU and UK negotiators over the last 24 hours, on the terms of Britain's departure from the EU, any optimism will be for nothing if Prime Minister May can't get it agreed by her cabinet, when they meet later today at 2pm UK time, let alone the various factions in the House of Commons, when it comes to any possible vote," said CMC Markets analyst Michael Hewson.
"In a sign that the hurdles to acceptance remain huge, the various parties were lining up to criticise the plan even before the details had been made available, in a classic case of dogma trumping pragmatism.
"The deal may well be unpalatable to one side or the either, or both, but to denounce the deal before the details have even been scrutinised speaks to an open mouthed and close-minded approach, something that is sadly typical of UK politics and politicians these days."
On the data front, the PPI, CPI and RPI are all due at 0930 GMT.
In corporate news, global technology company Smiths Group said it expected to meet full year expectations based on first quarter performance where revenue for the three months to end October fell 1% on an underlying basis.
Smiths said it expected to at least sustain the full year underlying growth rate, with its performance weighted towards the second half.
The company also announced it intended to separate Smiths Medical from the group and concentrate on growing as an industrial technology group.
Prudential's profit growth accelerated in the third quarter of the year, including at its M&G Prudential arm as it prepares to demerge.
In the first nine months of the year, life insurance new business profit increased 17% at constant currency rates, with Asia jumping 15% and the US roaring 22% higher.
Residential property business Grainger reported a 26% improvement in its adjusted earnings for the year ended 30 September, to £94.0m, on Wednesday, with profit before tax increasing 17% to £100.7m.
At the same time, the FTSE 250 company said it has conditionally agreed to acquire the entire share capital and shareholder loans in GRIP REIT from its joint venture partner, APG, for £396m.
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