London pre-open: Stocks seen up ahead of US CPI

(Sharecast News) - London stocks were set to rise at the open on Wednesday following a positive session on Wall street, as investors eyed the latest US inflation reading.

The FTSE 100 was called to open around 30 points higher.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "All eyes are on the US CPI update today. Both headline and core inflation are expected to have moderated last month.

"If that's the case, the risk rally will likely continue. And if it's not the case, the risk rally could continue, as well. Until when? Until it doesn't."

The US CPI for April is due out at 1330 BST, along with retail sales and the NY Empire State manufacturing index.

In UK corporate news, Burberry warned of a challenging first half after slowing demand hit annual sales and profits.

The luxury fashion brand said revenues in the year to 30 March fell 4% to £2.97bn. On a constant currency basis, revenues were flat, while like-for-like store sales fell 1%.

Burberry said a "robust" first half, where comparable store sales had sparked 10%, had been offset by a more challenging second half, when they fell 8%.

Landscaping and building products supplier Marshalls said revenues fell 10% in the four months to April 30 as weak demand in the housing and maintenance market continued, adding that it still expected flat profits for 2024.

Revenue came in at £199m for the period, down from £227 a year earlier. Marshalls stuck to its forecast of a modest recovery in the second half of the year "predicated on a progressive improvement in the macro-economic environment".

Engineering firm Spirax-Sarco maintained its guidance for organic sales growth this year despite ongoing weakness in the wider market, though foreign exchange headwinds will impact profits more than previously thought.

Spirax said currency headwinds are expected to persist during 2024, with an impact of around 3% to sales and 6% to adjusted operating profit. The sales impact was downgraded from 5% at the time of its full-year results in March.

However, the company is still guiding to mid to high-single-digit organic growth in revenues, and modest progress in the adjusted operating profit margin from 20.7% last year.