London pre-open: Stocks seen higher on positive cues; UK borrowing figures eyed

Tue 22 Aug 2017

LONDON (SHARECAST) - (ShareCast News) - London stocks were set for a firmer open on Tuesday following mostly positive sessions in the US and Asia.
The FTSE 100 was expected to open 21 points higher at 7,340.

CMC Markets analyst Michael Hewson said: "While markets in Europe struggled, US markets were more mixed with the Nasdaq slipping back while the Dow and S&P500 posted some modest gains, and this looks as if it will translate into a more positive start for European stocks today after yesterday's disappointing start. The weakness of the US dollar may well be helping limit the downside for now, but the political environment in Washington DC is still keeping markets on their toes."

On the data front, public sector net borrowing figures are at 0930 BST, while the CBI industrial trends survey is at 1100 BST.

Hewson said: "Today's borrowing numbers for July are expected to show a modest increase of 0.2bn, a significant improvement on June's 6.9bn, helped by improved tax receipts.

"We'll also get a look at the latest CBI industrial orders data after an extremely positive number in July boosted confidence in the manufacturing sector, and showed output growing at its fastest rate since the mid-1990s. August is expected to show a slight slowdown to 8 from 10 in July, but nonetheless is expected to largely sustain the positive trend seen a month ago."

Investors will also be looking ahead to the annual banking conference in Jackson Hole, which kicks off on Thursday.

In corporate news, Persimmon reported a 30% improvement in its profit before tax in the six months to 30 June on Tuesday, to 457.4m, which came off revenue that was 12% higher than the same time last year at 1.66bn.

The FTSE 100 housebuilder said legal completions were ahead 8% to 7,794, which meant an extra 556 new homes were delivered in the half, while its average selling price was 213,262, up 4% from 205,762 last year.

First half earnings from Wood Group were down more than expected due to a particularly challenging North Sea performance, though a stronger second half is expected to keep the full year on track.

Revenue of 2.28bn for the first six months of the year was down 11% on the same period last year, with earnings before interest, tax and amortisation down 24% to 127m.
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