London pre-open: Stocks seen higher as Brexit developments eyed
London stocks were set to edge up at the open on Monday, with investors likely to keep a close eye on any Brexit-related developments.
The FTSE 100 was called to open 15 points higher at 7,010. Meanwhile, sterling was down 0.2% against the dollar and the euro at 1.3122 and 1.1355, respectively, after a weekend of Brexit negotiations between Dominic Raab and the EU's chief negotiator, Michel Barnier, failed to yield any breakthroughs.
Investors will now eye the meeting of EU leaders in Belgium later in the week that was meant to be used to finalise the UK's divorce from the EU.
"The pound is currently finding support at $1.31, however that level could quickly be breached once the European session kicks off," said London Capital Group analyst Jasper Lawler.
"The pound dropped heavily on the open as Brexit talks are in danger of hitting a complete standoff. Theresa May dismissed the draft treaty bringing the UK out of the EU, as a 'non-starter' and a risk to tearing her government apart.
"With no more talks planned for before the EU leaders’ summit on Wednesday further progress is looking unlikely. Theresa May is aware that the worse that she could do here is accept a deal that will be a complete no go within her government. Under those circumstances she and the Tories could struggle to hang onto power."
In corporate news, convenience food manufacturer Greencore Group has struck a deal to sell its entire US business for $1.1bn (£817m) and return a chunk of the cash to shareholders.
The Dublin-headquartered, FTSE 250-listed outfit said it would return £509m, or 72p per share, of the £802m net proceeds to shareholders, if they approve the deal.
Caledonia Investments spent £117.2m for a 98.9% stake in Deep Sea Electronics in a transaction that values the business at £162.0m.
Caledonia has also provided a short-term bridging loan of £50m, which will be replaced in due course by external bank debt. The management team has invested £1.7m for the remaining equity.
Fashion brand Superdry updated the market on the trading and financial impacts of “two specific factors” on Monday morning - an unseasonably hot summer and autumn in the UK, continental Europe and the east coast of the US, and historic foreign exchange hedging mechanisms that it had in place.
The FTSE 250 company said those mechanisms had not provided the same degree of protection as expected, leading to around £8m in additional foreign exchange costs over the financial year, while the hot weather had a significant impact on demand for sweats and jackets, which account for around 45% of Superdry's annual sales.