London pre-open: Stocks to nudge up as Johnson pulls out of Tory leadership race

(Sharecast News) - London stocks were set to nudge up at the open on Monday as all eyes remained firmly on Westminster after Boris Johnson pulled out of the race to become Prime Minister. The FTSE 100 was called to open five points higher at 6,974.

In a statement on Sunday, the former PM said he had the support to stand but that it would not be the right thing to do and that there needed to be a "united party in Parliament".

That leaves former chancellor Rishi Sunak and cabinet minister Penny Mordaunt in the running. Sunak could be confirmed as PM as soon as Monday.

CMC Markets analyst Michael Hewson said: "It was set up to be another key week for the pound with the prospect of another Conservative party leadership contest however the unexpected decision of Boris Johnson not to declare his candidacy for the contest appears to have simplified the outcome, given the number of MPs who have already declared their support for Rishi Sunak.

"With the only other challenger being Penny Mordaunt lagging behind, it's quite likely that Rishi Sunak could well be elected unopposed and be Prime Minister by the end of the day.

"This also means that the prospect of a delay to the 31st October budget has receded, with all eyes set to be on UK gilt markets this morning, after the late yield surge at the end of last week, over concerns there might be a delay."

In corporate news, educational publisher Pearson said that underlying sales were up 7% in the third quarter, leading the group to reaffirm its full-year sales and adjusted operating profit expectations.

Pearson said assessment and qualifications sales grew 12%, with good performances in clinical assessment due to a continued focus on health and wellness, while virtual learning sales increased 5% year-on-year, underpinned by a solid performance from its virtual schools unit. Higher education sales, on the other hand, dropped 4%, consistent with expectations.

Auto Trader said it had sold its Webzone subsidiary to Mediahuis Ireland for €30m. Mediahuis owns the CarsIreland.ie and Cartell.ie websites.

For the year ended 31 March 2022, Webzone, which trades as Carzone in Ireland, contributed total revenue of £4.9m and operating profit of £1.3m to Auto Trader's group results.