London pre-open: FTSE to open lower ahead of European data

UK stocks are expected to track declines seen in the US overnight, with City sources predicting the FTSE 100 will open around 45 points lower than Wednesday's close of 6,399.73.

Data out overnight revealed that the HSBC 'flash' purchasing managers' index (PMI) for Chinese manufacturing rose to 50.4 in October, but while overall growth picked up there were still some signs of weakness in the data.

The headline figure is an improvement from the 50.2 reading in September and surprised analysts who were expecting no change. However, a recovery in the employment sub-index, from 47.5 to 48.6, was largely behind the rise. In fact, both the output and new orders components declined in October, to 50.7 and 51.4 respectively.

Also on the agenda on Thursday are manufacturing and services numbers for France, with the PMI for each both expected to show further weakness. They are expected to decline to 48.6 and 48.2 respectively from 48.8 and 48.4 previously.

Meanwhile, German PMIs will also be in focus. "The economic malaise is also expected to be reflected in the German numbers with the manufacturing sector showing further weakness from 49.9 to 49.6, while services are expected to remain fairly robust albeit declining from 55.7 to 55," said CMC chief market analyst Michael Hewson.

"On a slightly positive note quarterly Spanish unemployment is set to show a fall from 24.5% to 24.1%, a small victory albeit a fairly hollow one, and the lowest number since Jan 2012."

In company news, mining group Anglo American reported falling output of some commodities in the third quarter but delivered a big increase in production from its larger iron ore operations. The company produced 13m tonnes of iron ore in the three months to 30 September, up 37% on last year, following the implementation of the production recovery plan at Sishen and record output at Kolomela. Anglo also narrowed its guidance for the full year and now expects to mine 45m-46m tonnes of iron ore over 2014, compared with its previous 44m-46m forecast.

Consumer goods group Unilever reported weaker third-quarter sales growth but said it was a creditable performance in markets where economic conditions were putting consumers under pressure. Market growth slowed in emerging countries and particularly in China, Europe faced price deflation and poor summer weather compared with last year but conditions in North America started to improve.

First half trading profits for Tesco fell 39.4% at constant exchange rates to £937m, well above consensus analyst forecasts of £853m, as chairman Sir Richard Broadbent announced his own succession process had begun. UK like-for-like sales were down 4.6% due to competition in the UK grocery market. The impact of the profit overstatement, the 'black hole' in its accounts, has been confirmed as £263m, slightly more than the £250m originally reported.