London pre-open: Stocks seen higher ahead of inflation data

Tue 12 Sep 2017

LONDON (SHARECAST) - (ShareCast News) - London stocks were set for a positive open on Tuesday, taking their cue from an upbeat session on Wall Street as investors eyed key UK inflation data.
The FTSE 100 was expected to open 15 points higher at 7,428.

On the data front, the UK retail price index, producer price index and consumer price index are all due at 0930 BST.

CMC Markets analyst Michael Hewson said: "After peaking at 2.9% in May the last two months have seen UK inflationary pressures diminish somewhat, but there is a risk that we could see an uptick in the August CPI numbers to 2.8%, largely as a result of last year's decision by the Bank of England to cut rates to 0.25%, and embark on further QE, which prompted further sterling weakness into the back end of 2016, a self-inflicted wound if ever there was one."

Market participants will also be digesting news that MPs have backed the EU Withdrawal Bill - often referred to as the Repeal Bill - by 326 votes to 290, despite accusations that it was a "power grab" by ministers, with Labour calling it an "affront to parliamentary democracy". The bill's aim is to transpose relevant EU law onto the UK statute book when the UK eventually leaves the block in 2019. It will also overturn the 1972 act that took Britain into the European Economic Community.

However, there are concerns over the so-called Henry VIII powers in the bill, which grant ministers power to amend the law without normal parliamentary scrutiny.

Geopolitics was likely to remain in focus after the UN imposed a fresh series of sanctions on North Korea late on Monday, restricting oil imports and banning textile imports.

In corporate news, the AA held "preliminary talks" with insurer Hastings over a potential merger of the motor association's insurance business, it confirmed on Tuesday.

Responding to press speculation, the AA said it "regularly reviews all strategic options, including whether a spin-off of any of its business lines would unlock further value and be in its shareholders' interests".

JD Sports Fashion reported "another record result" for its half year, with operating profit 33% higher year-on-year at 103.3m.

The FTSE 250 retailer said its revenue for the 26 weeks to 29 July was 1.367bn, 41% higher than at the same time last year, with profit before tax improving 33% as well to 102.7m.

Its board lifted the interim dividend per ordinary share by 4%, to 0.26p.

Ashtead, the construction equipment specialist, reported strong growth in rental revenue and profits in the first quarter of its financial year, adding that clean-up efforts after Hurricanes Harvey and Irma were likely to increase levels of demand for its fleet.

Rental revenue increased 25% to 828.8m in the three months to 31 July and underlying pre-tax profit surged 30% to 238m.
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