London pre-open: Stocks to nudge lower as investors mull Brexit news

updated: 23 October 2019 at 7:38am Author: Michele Maatouk

(Sharecast News) - London stocks were set to nudge lower at the open on Wednesday as investors mull the latest twists and turns in the Brexit saga.
The FTSE 100 was called to open seven points lower at 7,205.

Prime Minister Boris Johnson paused his Brexit bill on Tuesday after MPs rejected his attempts to rush it through the Commons. According to reports citing a source at No10, Johnson will call for a general election if EU leaders agree to grant the UK a Brexit extension until January.

CMC Markets analyst Michael Hewson said: "It is no secret that the Prime Minister would prefer a short extension so that he can exert maximum pressure on MPs to push the bill through, and he can point to the fact that he was able to get his deal passed at the first time of asking, unlike Theresa May who had three attempts and failed. If on the other hand the EU were to accede to the UK request for a long extension then it is conceivable that the UK government might look to junk the deal entirely and push for an election.

"It seems clear that there is a pathway to a deal, and depending on the extension, MPs could still attach a number of amendments to the deal as it gets scrutinised across the house. While some of these amendments are eminently sensible there are still some MPs who want to thwart the Brexit process, whatever the cost. Furthermore, the delay also eats into the time available to discuss the future relationship which means that the transition period will also need extending beyond December 2020, whatever is decided in the coming days or weeks."

On the data front, BBA mortgage approvals for September are at 0930 BST.

In corporate news, Antofagasta reported a 0.8% drop in third-quarter group copper production to 197,000 tonnes, though it maintained annual targets as production for the first nine months of the year was 15.6% higher than in the same period in 2018.

However, the mining giant warned that recent civil unrest in Chile could disrupt the delivery of supplies and the transport of employees and contractors to its operations, with the impact on production expected to be approximately 5,000 tonnes.

Rio Tinto announced that it would conduct a strategic review of its interest in the New Zealand Aluminium Smelter (NZAS) at Tiwai Point, to determine the operation's ongoing viability and competitive position.

The FTSE 100 company said that under current market conditions and with high energy costs, it expected the short-to-medium outlook for the aluminium industry to be "challenging", with the asset to continue to be unprofitable. It said it intended to hold discussions with the government of New Zealand and energy providers, to explore options and identify economically-viable solutions to find a pathway to profitability for the asset.