London pre-open: Stocks to rise ahead of Starmer-Streeting meeting

(Sharecast News) - London stocks were set to rise at the open on Wednesday as US President Donald Trump headed to China for a summit with Xi Jinping, and as UK Prime Minister Keir Starmer was due to hold a meeting with health secretary and leadership challenger Wes Streeting following a wave of ministerial resignations.

The FTSE 100 was called to open around 56 points higher.

Danske Bank noted: "More than 90 MPs called for PM Starmer to step down, and four ministers handed in their resignation yesterday.

"Bond markets fear looser fiscal policy in case of a change of leadership, which drove 30-year Gilt yields to the highest levels since 1998. If Starmer resigns, it could also open up for a more hawkish policy stance from the Bank of England, which was reflected in market pricing yesterday."

As far as Trump's meeting with Xi Jinping is concerned, Stephen Innes at SPI Asset Management said: "Traders are approaching the Trump-Xi summit like card sharks crowding around a high-stakes poker table where nobody expects friendship, but everyone desperately wants the game to continue.

"This is not a market pricing in a grand bargain between Washington and Beijing. It is a market pricing in the survival of manageable tension, the kind of uneasy coexistence that allows supply chains to keep moving, exporters to keep shipping, and global portfolio managers to continue reaching for beta without constantly glancing at the geopolitical fire exits."

In UK corporate news, housebuilder Vistry said it expected first-half profits to be "significantly" lower than last year as it focused on cash generation and cutting debt, forecasting full-year adjusted pre-tax earnings to be in the middle of estimates.

In a trading update, Vistry said it expected the second half to be in line with 2025, driven by a step up in demand for affordable housing, but noted that the level of macroeconomic uncertainty has increased since the start of the Iran war, "and with it the range of potential outcomes for the current year".

Babcock International posted a jump in annual revenues but confirmed profits had been hit by a one-off charge on a contract to build five ships for the Royal Navy.

Updating on trading post-close, the engineer said revenues in the year to 31 March had risen to �5.27bn from �4.83bn, boosted by strong performances in its nuclear and aviation divisions. However, underlying operating profits fell to �293m from �363m, following a �140m non-recurring charge on the Type 31 contract.

Spirax Group delivered midsingledigit organic revenue growth and an improvement in adjusted operating margins in the first four months of the year, prompting it to reiterate fullyear guidance despite a persistently weak industrial production backdrop.

The company said trading continued to run ahead of global industrial production, which remained subdued at 1.4% in the first quarter and particularly soft across key European markets. Excluding China, IP was 1.5%, with the fullyear forecast of 1.9% unchanged and weighted to the second half.

Spirax added that macroeconomic uncertainty remained elevated, with the ongoing Middle East conflict, tariff developments and higher energy costs continuing to weigh on industrial activity.