London pre-open: Stocks seen lower after US, Asian losses

London stocks looked set to kick off the month of September in a downbeat fashion on Thursday following losses in the US and Asia.

The FTSE 100 was called to open 40 points lower at 7,244.

CMC Markets analyst Michael Hewson said: "As we look ahead the start of the month, Asia markets have started on the back foot, which is set to drag on European markets which are also set to open lower, as investors start to weigh reports that the US government has banned the sales of chips to Russia and China by Nvidia.

"We already know that the latest August manufacturing PMIs from Germany and France are expected to contract at 49.8 and 49 respectively, however we’ll also get the picture from Spain and Italy which are expected to be equally as weak, with Spain set to slip to 48.5 and Italy to 48.1. The UK is expected to be confirmed at 46.

"In the US, weekly jobless claims appear to have plateaued in and around the 250k level, after hitting an 8-month high of 261k back in July. With the official payrolls numbers due tomorrow there is some uncertainty as to whether the sort of jobs growth we saw in July was a one-off, or whether it is prompting a return to the workforce from some early retirees.

"Yesterday’s ADP report would suggest not, with only 128k jobs added in August under the new methodology. This was well below forecasts of 300k, however on the wages numbers it is becoming apparent that upward wage pressure is increasing, with average wage gains of 7.6% for those in jobs and around 16% for those moving to different jobs."

The UK S&P Global/CIPS manufacturing PMI for August is due at 0930 BST.

In corporate news, communications and advertising giant WPP said it will acquire European ecommerce consultancy Newcraft for an undisclosed sum.

WPP said the addition of Newcraft, based in the Netherlands, will unlock business opportunities for its global clients by combining transformation strategy with operational commerce expertise to deliver "growth and tangible business results".

IT services provider Kainos said that its full-year results were expected to meet current market forecasts for revenues of £335.7m-373.4m and adjusted pre-tax profits of £62.7m-66.5m.

Kainos stated that trading in the five months ended 1 September had been "very strong" across both its digital services and workday practice units but noted that it remained "cognisant" of the global macroeconomic landscape.