London pre-open: Stocks seen lower as investors keep an eye on oil

Stocks in London are expected to open a little lower on Wednesday following mostly negative sessions in the US and Asia, as investors keep an eye on oil prices.

The FTSE 1000 is called to open 29 points lower than Tuesday’s close at 5,933.

“Choppy oil prices are likely to keep markets on edge as the effectiveness of a Russian-Saudi output freeze gets priced out,” said CMC Markets’ Jasper Lawler.

“The only good thing about the production freeze was that it could be prelude to a cut, so Saudi oil minister al-Naimi saying there won’t be a cut has kicked the legs out from under oil market. The public spat between Iranian and Saudi oil ministers says it all. With relations between two of the biggest oil producers this bad, the Russian oil minister’s suggestion of a 5% production cut is dead on arrival.”

On the data front, UK CBI distributives trades data is at 1100 GMT. In the US, Markit services PMI is at 1445 GMT and new home sales are at 1500 GMT.

Barratt Developments profit surges

Barratt Developments hiked its dividend by a quarter after the housebuilder's profits mushroomed in the first half of the year.

The FTSE 100 construction group generated £295m pre-tax profit in the six months to the calendar year end, an increase of 40.3% on revenues that rose 19% to £1.88bn.

Unprecedented market challenges saw revenue and earnings take a tumble at Weir Group in the year to 1 January.

The FTSE 250 engineering group, which reported on Wednesday, saw revenue slide 21% on a reported basis, to £1.92bn from £2.44bn. At constant currencies, revenue was down 22%.

Operating profit fell 42% to £259m, with Weir's operating margin down 490 basis points to 13.5%. Its profit before tax was down 46% to £220m.

Earnings per share were down 45% to 78.4p. Weir Group's final dividend was 29p, making the year's total dividend 44p.

Petrofac's annual profit has plunged due to delays in getting production up and running at its Laggan-Tormore plant and the costs associated with it.

The FTSE 250 company said on Wednesday that for the year to 31 December 2015, it made a net profit of $9m (£6.4m), down from $581m.

Not incorporating the losses from the Laggan-Tormore plant, it would have made a net profit of $440m.

Chief executive Ayman Asfari said the results were adversely affected by project on Shetland.