London pre-open: Stocks seen up after Tuesday's selloff
(Sharecast News) - London stocks were set to rise at the open on Wednesday following heavy losses in the previous session, and despite the latest turmoil in UK politics.
The FTSE 100 was called to open around 50 points higher at 7,075, having closed down 2.9% on Tuesday amid renewed concerns about inflation and a global slowdown.
Politics will be in focus after Chancellor Rishi Sunak and Health Secretary Sajid Javid resigned on Tuesday evening, leaving Prime Minister Boris Johnson's future in doubt.
Naeem Aslam, chief market analyst at Ava Trade, said: "Today is going to be a tough day for the Prime Minister of the United Kingdom as most of his team resigned yesterday, showing a sign of no confidence.
"When a vote of no confidence is called in, it is highly likely that the Prime Minister will struggle. But the reality is that survival is basically a numbers game, and if the Prime Minister can gather more support in his corner, he may survive the biggest challenge of his political life.
"As for the markets, we have more uncertainty than ever. This is because, with the appointment of a new cabinet, it could mean a set of new policies and a lot of unanswered questions. Rishi Sunak did a good job during the Covid crisis by keeping the UK's economy from a complete disaster, and the public had somewhat confidence in his abilities to bring the UK economy out of the current recessionary environment."
In corporate news, online rail ticketing platform Trainline lifted annual guidance after a bigger-than-expected surge in demand for travel, particularly from US visitors.
The company now sees net ticket sales growth of between 18% and 27% versus pre-Covid fiscal 2020. It also expects revenue growth of between 22% - 31% and adjusted core earnings as a percentage of net ticket sales of between 1.9% - 2.1%.
Industrial thread maker Coats said it had bought Texon International Group, a footwear solutions provider, for an enterprise value of $237m.
Texon, a company with operations in Asia and Europe, supplies structural components to the global footwear market, Coats said.
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