London pre-open: Stocks seen flat; quiet day expected amid US holiday

London stocks were set for a muted open on Thursday following sold gains in the previous session and with volumes likely to be lower than usual as US markets will be closed for Independence Day.

The FTSE 100 was called to open four points higher at 7,613.

Ipek Ozkardeskaya, senior market analyst at London Capital Group, said: "Investors will likely chase dip-buying opportunities in downside corrections, as the soft British pound and the prospects of a cheaper liquidity remain mouth-watering in the actual context of the global equities rally."

On Wednesday, the IHS Markit CIPS purchasing managers' index for the services sector in June slipped below 50, pointing to a contraction for the first time since the Brexit referendum.

Ozkardeskaya said: "The UK economy will certainly need BoE’s help to survive a possibly messy divorce with the EU, on top of the negative repercussions of the US-China tensions. As such, the BoE doves continue gaining field. Though it is too early to call for a rate cut in the foreseeable future, the probability of a 25-basis-point action before the end of this year doubled to 45% since the beginning of this week."

In corporate news, Associated British Foods said group revenue rose 3% for the 40 weeks to June 22 at constant currency as it maintained its outlook for the full year.

The company said it expected good profit growth in Primark and, on an underlying basis, in its grocery operations.

"We continue to expect that the full year profit decline in sugar has been reflected in the first half. Our full year outlook for the group is unchanged, with adjusted earnings per share expected to be in line with last year," the company said in a trading statement.

Mediterranean-focussed oil and gas producer Energean has entered into a conditional sale and purchase agreement to acquire Edison Exploration & Production from Edison.

The FTSE 250 company said consideration for the purchase would be $750m, to be adjusted for working capital, with additional contingent consideration of $100m payable following first gas from the Cassiopea development, offshore Italy, expected in 2022.

Persimmon said it has maintained a "strong" financial performance even as it reported a 4% drop in overall interim revenue to £1.8bn, as housing revenues dropped by 6% following a fall in new housing legal completion volumes.

However, the housebuilder reported good progress on improving customer satisfaction as average sale prices edged up by 1%.