London pre-open: Footsie set to sag at opening bell on geopolitical jitters

Alexander Bueso Sharecast | 11 Aug, 2017 07:56 | | |

Night tube/underground, London

Stocks are set to start the day lower as selling carries over from the US and Asian trading sessions into the London open on the back of the continuing verbal stand-off between Washington and Pyongyang.

Traders are expecting a 50 point drop in the top flight index to 7,349 at the opening bell.

Overnight, US president Donald Trump stood his ground, saying after a speech in Bedminster, New Jersey that his 8 August threat of "fire and fury" against Pyongyang may not have been "tough enough".

"They should be very nervous, because things will happen to them like they never thought possible, OK? He’s been pushing the world around for a long time,” he said, in reference to the North Korean leader, Kim Jong Un.

Commenting on the situation in markets, David Madden, senior market analyst at CMC Markets UK said: "The tension between the US and North Korea is still dominating the news and it is looming over the financial markets. The uncertainty surrounding the situation has been the main driver of the markets recently, and the enormous surge in the volatility index (VIX) tells us exactly what traders are thinking."

As of 0730 BST, the Shanghai Stock Exchange's Composite Index was off by 1.54% to 3,211.49 and South Korea's Kospi by 1.69% to 2,319.71.

No major data releases are scheduled for release in the UK on Friday.

For later in the day, US consumer price data for July are expected at 1330 BST. Speeches from the presidents of the Federal Reserve bank of New York and his counterpart at the Minneapolis Fed are due at 1440 BST and 1630 BST.

Harmonised German consumer prices rose by 0.4% on the month and 1.5% on the year in July, according to the Federal Office of Statistics, confirming an earlier estimate.

French and Spanish CPI data for that same month are set for release at 0745 and 0800 BST, respectively.

Old Mutual hikes dividend

Financial services group Old Mutual posted a sharp 37% rise in adjusted pre-tax profits to £969m, helped in part by £108m of proceeds from the sale of its OMAM unit although it did incur in a goodwill impairment charge of £71m linked to UAP-Old Mutualin East Africa. On an IFRS basis profits before tax surged from £534m in the year-ago period to £940m, for earnings per share of 10.6p, with the latter up by 33%. Despite that, its net asset value per share decreased from 228.6p to 220.1p.

Domino's Pizza Group announced the creation of a partnership with its largest franchisee in London on Friday. The FTSE 250 company said that, as part of the transaction, it agreed to pay £24m for a 75% stake in a newly-formed company, whose assets will consist of all the franchisee's operations being 25 existing Domino's stores in London.

The Restaurant Group announced the appointment of Kirk Davis as Chief Financial Officer on Friday before the market open. Davis arrives having spent the previous three years in the same position for fellow FTSE 250-listed firm Greene King.

Pub operator and brewing company Greene King announced on Friday that Richard Smothers would be joining the firm in December 2017, and joining the board as chief financial officer in February 2018. The FTSE 250 firm said Smothers was joining from retailer Mothercare, where he was chief financial officer since March 2015.

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