London pre-open: Stocks seen lower on weak US and Asian cues

London stocks were set for a weaker open on Tuesday, tracking losses in the US and Asia as investors grew increasingly concerned about global growth.

The FTSE 100 was called to open 48 points lower at 6,725.

Stocks on Wall Street closed at a 14-month low on Monday amid growth worries and ahead of Wednesday's Federal Reserve policy announcement, while Asian shares slid after a speech by Chinese President Xi Jinping failed to boost sentiment.

In an address to commemorate the 40th anniversary of China's economic reforms, Xi called for China to "stay the course" on its current path of reform and said "no one is in a position to dictate to the Chinese people what should or should not be done."

London Capital Group analyst Jasper Lawler said Xi's failure to mention any new reforms or stimulus left investors disappointed.

As far as the US policy announcement is concerned, Lawler said: "The market’s overriding fear is that the Fed will press ahead with plans to raise interest rates, which could be too much for the US economy to handle. An indication from the Fed that they will slow their pace of hikes could calm these jittery markets.

"However, until the Fed have confirmed that as a course of action, investors will remain skittish. The volatility index, also known as the fear gauge lifted 2.27 points to a seven-week high."

In UK corporate news, oil services engineer Petrofac said it was trading in line with expectations for the calendar year.

New order intake has grown to $5.0bn so far in 2018, up from $3.3bn at the half-year stage.

Wood Group said it had has won a 10 year contract worth $66m to supply programmable digital control technologies to the Sellafield nuclear site in Cumbria, UK.

The contract covers all stages of system design, manufacture and assembly of equipment, obsolescence management and maintenance support to project work and decommissioning carried out by Sellafield.

Dacha confirmed the completion of the acquisition of the entire share capital of Laboratories Vencofarma do Brasil Ltda (Venco), based in Londrina, Brazil, for BRR185m (£37.8m).

The 250 company said Venco had a “large portfolio" of vaccines and other food-producing animal products which it sold predominantly within Brazil. It said the acquisition provided it with a “strategically significant” presence within the rapidly growing Brazilian and South American markets.