London pre-open: Stocks seen muted after failed coup against Putin
Sharecast – The was called to open six points higher at 7,468.
CMC Markets analyst Michael Hewson said: “Friday’s weak finish hasn’t translated into a strongly negative vibe as we start a new week for Asia markets, even allowing for events in Russia at the weekend which aren’t likely to have helped the prevailing mood, with the US dollar slightly softer this morning after getting a haven bid at the end of last week.
“With economic data continuing to show varying signs of vulnerability, particularly in manufacturing the situation could have got even spicier over the weekend when Wagner Group boss Yevgeny Prigozhin set his troops on the road to Moscow in an insurrection against the Kremlin, and Russian President Vladimir Putin.
“As it turns out a crisis was quickly averted when it was announced that Prigozhin would go into exile in Belarus, with any charges against him dropped, and Wagner troops would return to their bases.
“One can only imagine the reaction if that news had broken if markets had been open at the time, however it only adds to the general uncertainty surrounding the war in Ukraine and how quickly things can start to unravel.
“This weekend’s events also serve to indicate how fragile Vladimir Putin’s position is given that one of his most trusted advisors suddenly went rogue.”
In corporate news, third-quarter sales at discount fashion chain Primark grew 13%, driven by strong summer sales and higher prices as customers seek value for money amid the cost-of-living crisis, leading parent company Associated British Foods (LON:) to lift annual guidance.
Like-for-like sales grew 7% in the 12 weeks to May 27, with revenue reaching almost £2bn in the quarter and £6.2bn in the year to date.
“As well as seasonal clothing and accessories, sales in health and beauty products were particularly strong,” AB Foods said.
It added that it now expected group adjusted operating profit for the full year to be moderately ahead of last year, with earnings per share also benefiting from a lower group effective tax rate now expected to be below that seen in the first half of the year.
AB Foods, which also owns the Kingsmill bread brand among others in its large food business, said trading in the division continued to be good, with strong constant currency sales growth in its grocery unit, due to price rises.
