London pre-open: Stocks seen lower ahead of Fed minutes, US inflation
London stocks were set to fall at the open on Wednesday as investors eyed the release of the minutes from the latest Federal Reserve meeting and the March inflation figures for the US.
The FTSE 100 was called to open 24 points lower at 7,242.
Following healthy gains in the UK and Europe on Tuesday and a strong showing in the US on the back of soothing comments from China's Xi Jinping, caution was expected to set in.
CMC Markets analyst Michael Hewson said the release of the latest Fed minutes will give investors an insight into policymakers' thinking about the glide path of rate rises this year and any concerns they might have about the recent narratives around trade policy.
"We could also get further clarity as to whether four rate rises this year is something that merited a serious discussion between policymakers, as well as the thinking behind adding a rate rise to the 2019 dot plots," he said.
As far as inflation is concerned, the consumer price index is expected to have picked up to 2.4% in March from 2.2% the month before on an annualised basis, while core CPI is expected to have firmed to 2.1% from 1.8%. The figures are due at 1330 BST, while the minutes are out at 1900 BST.
There was no shortage of data due in the UK either, with industrial and manufacturing production at 0930 BST, along with the goods trade balance.
Industrial production is expected to have risen 0.4% on the month in February, down from 1.3% in January, while manufacturing production is forecast to have expanded 0.2%. On an annualised basis, both are expected to show much better numbers of 2.9% and 3.3%, respectively.
In corporate news, Hammerson said it had received and rejected a second bid offer announces that the Company from French shopping mall owner Klépierre.
The revised offer, made on April 9, was 635p a share, made up of 50% in new Klépierre shares and the rest in cash.
David Tyler, Chairman of Hammerson, said: "The board has considered the revised proposal from Klépierre carefully. At 635p, it is only a 3% increase on the previous proposal and continues very significantly to undervalue the company."
Tesco declared its first year-end dividend since 2014 as it reported a 28% rise in underlying operating profits thanks to improved margins and surging cash generation.
The supermarket giant turned over £57.5bn in the 52 weeks ended 24 February, with UK like-for-like sales up 2.2%. Operating profits of £1.64bn fed through to pre-tax profits that rocketed to £1.3bn from £145m the year before.
Webuyanycar.com owner BCA said full year trading was ahead of expectations with “strong profit growth and with a net debt position lower than market forecasts”.
BCA said the positive outlook reported at the half year in November had continued during the second half of the financial year.
PageGroup reported a record first quarter gross profit in a trading update on Wednesday, rising 12.3% year-on-year to £187.7m.
The also claimed a record headcount of 7,311, after investing in 183 fee-earners in the quarter, and a strong balance sheet, net cash of £91m, up from £86m a year ago.