London pre-open: Stocks to recover ahead of jobs data
By Michele Maatouk
Date: Tuesday 11 Dec 2018
(Sharecast News) - London stocks were for a positive open on Tuesday following heavy losses in the previous session, underpinned by a late recovery on Wall Street, as investors continued to eye the latest Brexit-related developments.
The FTSE 100 was called to open 55 points higher at 6,776.
Theresa May's decision to call off this week's parliamentary vote on her Brexit deal sent the pound crashing on Monday to its lowest level in almost two years.
London Capital Group analyst Jasper Lawler said: "Until traders have any sense of what will happen with Brexit, they will remain extremely nervous. Whilst the possibility of a hard Brexit remains very real, this combined with the increasing political uncertainty is turning out be a lethal mix for the pound."
May will head back to Brussels this week in an attempt to renegotiate the Irish backstop with the EU, despite the EU's insistence that no more negotiation was possible.
"The UK ministers break for Christmas on 20th December. Investors will be watching carefully to see whether she can pull something out of the bag by then, or whether this was a tactic to scare Parliament with the market's reaction. Either way, uncertainty will keep the pound under significant pressure for the time being," Lawler said.
On the data front, the ILO unemployment rate, average earnings and the claimant count are all due at 0930 GMT.
In corporate news, equipment rental company Ashtead said it expected full year results to beat expectations after interim pre-tax profit rose 45% to £461m.
WPP's new boss Mark Read will spend £300m over the next three years to restructure the marketing and advertising giant with the aim of achieving an operating profit margin of at least 15%.
Having so far sold off 16 non-core investments and associates, to raise £704m to reduce debt, he said preparations were well underway to divest a majority stake of its Kantar research business by the second quarter of next year.
International service company Serco Group has signed contract extensions with both Peterborough City Council and Lincolnshire County Council to continue providing a number of frontline and back office services to those councils.
The company said the contract extensions had a combined total value to Serco of approximately £135m.
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