London pre-open: Stocks seen lower amid Covid-19 concerns
(Sharecast News) - London stocks were set to fall at the open on Wednesday amid concerns about rising coronavirus cases and the impact of lockdowns and restrictions on the economy.
The FTSE 100 was called to open 32 points lower at 6,333.
CMC Markets analyst Michael Hewson said: "After the decent vaccine inspired rally that we saw on Monday, markets in Europe had a slightly more tempered look to them on Tuesday as the continued rise in virus cases started to experience a bit more cut through in the face of some disappointing US economic data.
"With cases of coronavirus continuing to rise sharply in the US, and various states locking down in the face of colder weather, and rising cases, it is now becoming much more obvious that the next two months are likely to be even worse for US businesses, particularly since another fiscal stimulus plan still seems quite some way off.
"As a consequence, US markets slipped back into negative territory, closing lower for the first time in three days. After yesterday's modest pullback markets here in Europe look set to continue that softness as the investors start to focus more on the near-term issues of the economic damage caused by extended lockdowns and restrictions, rather than the prospect of a vaccine that still remains some weeks away."
On home shores, investors will be digesting the latest data from the Office for National Statistics, which showed that the inflation rate rose to 0.7% in October from 0.5% in September. This was above consensus expectations for no change.
Meanwhile, core inflation increased to to 1.5% from 1.3%, also versus expectations for no change.
In corporate news, energy supplier SSE reported a fall in adjusted operating profit after taking a £115m hit from the coronavirus pandemic, but also maintained its interim dividend payout.
The company said adjusted operating profit fell 15% £418.3m. The dividend was held at 24.4p a share and SSE said it planned to recommend an annual payout of 80p a share plus RPI inflation.
RSA Insurance has agreed to be bought for £7.2bn by a consortium comprising Intact Corp of Canada and Denmark's Tryg A/S. The consortium will pay 685p in cash for each of RSA's shares.
Speciality chemical company Croda International has agreed to acquire fragrances and flavours company Iberchem.
The company said total consideration for the acquisition would be €820m (£736m) on a debt-free, cash-free basis. It said Iberchem has been majority-owned by Eurazeo since 2017.
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