London pre-open: Stocks seen lower as geopolitical risks build

Mon 21 Aug 2017

LONDON (SHARECAST) - (ShareCast News) - London stocks are set for a weaker open on Monday as geopolitical risks continue to dent risk appetite.
The FTSE 100 is expected to open 20 points lower at 7,304.

Oanda analyst Craig Erlam said: "Geopolitical risk could rear its ugly head again this week as the US and South Korea begin planned military exercises on Monday, just as tensions between the North and these two countries appear to have calmed. Should North Korea respond in kind, then we could see a repeat of the safe haven rush from a couple of weeks ago when the situation previously flared up between the countries.

"The political situation in the US is another one to watch, with it taking over the reins last week as reports circulated that Donald Trump was about to lose one of his most important members of staff - Gary Cohn - but instead it was Steve Bannon that made way. While this is seen as far more palatable for investors, it still caps off yet another troubling week for the President."

Investors will also be looking ahead to the Jackson Hole symposium in Wyoming, which kicks off on Thursday.

In corporate news, Rathbone Brothers confirmed that it was in exclusive merger talks with stockbroker Smith & Williamson. It was reported over the weekend by Sky News that the pair were in talks over a 2bn combination.

Wood Group has been awarded a five-year, multimillion dollar contract by Phillips 66 to provide supplemental maintenance services and support for small capital construction projects and turnarounds to the Sweeny Refinery, approximately 65 miles southwest of Houston, it announced on Monday.

The FTSE 250 company said 175 Wood Group employees, around 80% of whom worked for the previous contractor, would be based at the refinery to provide the maintenance services. Wood Group said it has supported the refinery for more than 20 years, providing specialty heating, ventilation and air conditioning and construction services, and upgrades to the process controls, alarms and environmental data management systems.
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