London pre-open: Stocks seen flat; earnings in focus

London stocks were expected to open broadly flat on Wednesday following downbeat sessions in the US and Asia, amid lower commodity prices.

The FTSE 100 was seen opening unchanged from Tuesday’s close at 6,185.

On the data front, UK construction PMI is at 0930 BST. In the US, the ADP employment report is at 1315 BST, while trade balance is at 1330 BST. US durable goods orders and ISM non-manufacturing are at 1500 BST.

“Due to the UK holiday on Monday the UK data is one day out of sync which means that in the wake of yesterday’s poor manufacturing number, a decent number from the construction sector for April would be particularly welcome today, with a slight slowdown to 54 from 54.2 expected,” said CMC Markets’ Michael Hewson.

Royal Dutch Shell’s first-quarter earnings on a current cost of supplies basis fell 58% from the previous year to $1.55bn as weak oil prices continued to take their toll, but the results were still better than analysts had expected.

Chief executive Ben van Beurden said: “We continue to reduce our spending levels, to capture cost opportunities and manage the financial framework in today’s lower oil price environment. The combination with BG is off to a strong start, as a result of detailed forward planning before the completion of the transaction.

“This will likely result in accelerated delivery of the synergies from the acquisition, and at a lower cost than we originally set out.”

Poor but unpredictable sales in the year to date saw high street fashion retailer Next widen its guidance for the year in a trading update on Wednesday.

The FTSE 100 firm said total sales from 31 January to 2 May were down 0.2%, with full-price sales down 0.9% - at the lower end of its full-year sales guidance of -1% to 4%.

“We believe it is unlikely (but possible) that sales will deteriorate further, and we have seen a significant improvement over the last few days as temperatures have risen,” Next said.

Sainsbury's annual results showed the severe hit to its finances by the industry price war and ensuring food price deflation but profits fell less than analysts expected.

Profits before tax slumped 14% to £587m but this was better than the consensus forecast of £575m, while like-for-like sales fell 0.9% to £25.8bn.