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(Alliance News) - Stock prices in London are seen opening higher on Wednesday following record highs on Wall Street on Tuesday, amid hopes for a possible breakthrough in deadlocked US economic stimulus talks.
In early company news, the UK competition regulator said it would probe the joint venture between Danish brewer Carlsberg and UK brewer and pub operator Marston's. Housebuilder Persimmon said its new chief executive is set to start earlier than planned. IT firm Softcat is set to resume dividends.
IG futures indicate the FTSE 100 index is to open 17.78 points higher at 6,094.40. The blue-chip index closed down 50.82 points, or 0.8%, at 6,076.62 on Tuesday.
The UK Competition & Markets Authority said it is considering whether the proposed brewing and distribution joint venture between Carlsberg and Marston's will result in the creation of a relevant merger situation and lead to a substantial lessening of competition in the UK.
Persimmon said incoming Chief Executive Dean Finch will take up his role earlier than planned. Finch will leave his role as National Express CEO on August 31.
"Persimmon now expects that Dean will be able to take up his post as Persimmon CEO earlier than originally envisaged and anticipates confirming his start date shortly," the housebuilder said.
National Express said Chief Financial Officer Chris Davies will take over as interim CEO from September 1, until a permanent appointment is made.
Rio Tinto said its Kennecott mine in Utah has experienced delays to the restart of the smelter due to unexpected issues that appeared following planned maintenance. The miner said it is working to limit any disruptions and expects to have the smelter fully operational in two months.
As a result, Rio Tinto's production guidance for refined copper in 2020 is now 135,000 to 175,000 tonnes from 165,000 to 205,000 tonnes previously.
Softcat said it has continued to trade satisfactorily during the final three months of the year ended July 31 and expects to deliver operating profit for the full year slightly ahead of expectations.
Softcat said cash generation has remained strong, and it now intends to resume its normal dividend policy and timetable later this year. This will include payment of the interim dividend previously cancelled in March of this year, the company added.
In the US on Tuesday, Wall Street ended mostly higher, with the Dow Jones Industrial Average down 0.2%, S&P 500 up 0.7% and Nasdaq Composite up 0.2%. The S&P 500 and Nasdaq Composite both ended at record closing highs.
While an eventual deal is expected, a key drag for equities over recent weeks has been the stalemate on Capitol Hill over a new economic rescue package, with Democrats' USD2 trillion proposal double the size of that put forward by Republicans – and both sides refusing to budge.
However, House Speaker Nancy Pelosi provided a chink of hope by saying her party could be willing to make cuts to its offer in order to seal a deal, then return to thrash out other issues after November's elections.
"We're willing to cut our bill in half to meet the needs right now," she said. "We'll take it up again in January."
Bloomberg News reported that Treasury Secretary Steven Mnuchin and Senate Majority Leader Mitch McConnell said Pelosi's decision to remove USD25 billion in funding for the Postal Service was an opening for talks.
The Japanese Nikkei 225 index ended up 0.3%. In China, the Shanghai Composite is down 0.1%. The Hang Seng index in Hong Kong is down 0.7%, with trade cancelled in the morning owing to a strong typhoon in the city.
US President Donald Trump on Tuesday said he has cancelled trade talks with Beijing days after a scheduled review of the initial Phase One trade agreement was postponed.
"I don't want to deal them now. With what they did to this country and the world I don't want to talk to China right now," Trump told reporters while travelling in Arizona. "They should have stopped it. so that's correct - I cancelled talks with China."
Trump's statement came a day after the president praised China's purchase of agricultural goods and the president's trade adviser Peter Navarro said the Phase One deal is "on track".
The pound was quoted at USD1.3260 early Wednesday, up from USD1.3225 at the London equities close Tuesday.
The UK inflation rate rose in July as the country continued its emergence from coronavirus lockdown measures, according to the latest figures from the Office for National Statistics.
The annual UK inflation rate was 1.0% in July, accelerating from 0.6% in June. The figure beat consensus, cited by FXStreet, for an 0.6% rise.
"The combination of soft USD dollar and firmer inflation should continue giving support to sterling's bullish trend against the US dollar, though most of the Cable's actual strength is due to the dollar weakness and there is a growing risk of a rapid unwind as the market is increasingly swamped with short USD positions," said analysts at Swissquote.
The euro was priced at USD1.1939, firm from USD1.1924. Against the yen, the dollar was trading at JPY105.57, up from JPY105.45.
Brent oil was quoted at USD45.12 a barrel Wednesday morning, lower than USD45.34 late Tuesday. Gold was trading at USD1,992.75 an ounce, down from USD2,000.34.
In the economics calendar Wednesday, at 1000 BST there is a eurozone consumer price index reading and US MBA mortgage applications at 1200 BST. In the evening, minutes from the US Federal Reserve's latest Open Market Committee meeting will be published.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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