London pre-open: Subdued start expected after huge sell-off

UK stocks were expected to open flat on Wednesday, as markets pause for breath following the previous session's sell-off which sent the FTSE 100 to its lowest level in four weeks.

The FTSE 100 is being called to open broadly unchanged from Tuesday's closing level of 7,820.36 after a 1.8% drop in the top-tier index was caused by a huge reduction in risk appetite across the board.

Rising tensions in the Middle East and fading hopes of imminent interest-rate cuts in the UK and US (in light of recent strong economic data) were dampening sentiment across European stock markets.

Comments from Federal Reserve chair Jerome Powell the previous evening will likely be weighing on investors' minds on Wednesday morning, after the head of the US central bank needed more confidence that inflation was on a downward trend before cutting interest rates. "Right now, given the strength of the labour market and progress on inflation so far, it’s appropriate to allow restrictive policy further time to work," he said.

Back on home soil, data released before the opening bell showed that the annual rate of UK inflation eased less than hoped in March, falling from 3.4% to 3.2%, missing the 3.1% consensus forecast. Following strong wage-growth data reported on Tuesday, the figures will likely prompt caution from the Bank of England as they attempt to keep price pressures in check before cutting rates.

Later in the session, we'll see inflation revisions to the eurozone inflation rate for March, along with speeches from a number of board members of the European Central Bank, including chief Christine Lagarde, along with comments from a number of prominent Fed figures.

In UK corporate news, GSK announced on Wednesday that a phase three trial demonstrated that gepotidacin, a potential first-in-class oral antibiotic, achieved a microbiological success rate of 92.6% in treating uncomplicated urogenital gonorrhoea, showing non-inferiority to the leading combination treatment. The FTSE 100 pharmaceutical giant said gepotidacin's safety profile was consistent with previous trials, with mild or moderate gastrointestinal adverse events reported. With gonorrhoea resistance on the rise globally, it said the findings showed gepotidacin as a promising new treatment option amid growing antibiotic resistance.

Mining giant Rio Tinto held annual production guidance, despite a sharp fall in first-quarter iron ore shipments and production. Iron ore production from Western Australia Pilbara assets fell 11% quarter on quarter to 78 million tonnes. Shipments were down 5% year on year to 78 million tonnes, and were 10% behind the fourth quarter. Rio cited weather disruptions leading to a lower stock drawdown compared to last year as the cause.

Meanwhile, Entain reported an in-line performance for its first quarter. Net Gaming Revenues, including its 50% stake in BetMGM, were ahead by 6% at constant currencies. International NGR was ahead by 8%, including an "encouraging" return to "good" growth in Brazil. NGR in Croatia and Poland continued to perform well, jumping by 130%. Entain boss Stella David said management was "particularly encouraged" by customer engagement in the US. David also expressed confidence in the sports-betting outfit`s ability to continue driving organic growth into 2025 and beyond.