London pre-open: Stocks seen muted ahead of ADP, Fed minutes

London stocks were set for a muted open on Wednesday following a downbeat session in the US.

The FTSE 100 was called to open just two points lower.

Kathleen Brooks, research director at XTB, said: "A mixture of macro fears for inflation and concerns about what the next Trump presidency may hold are dominating markets as we move to the middle of the week.

"The sell off in stocks in the US was driven by strong economic data, including a rise in job openings and the highest level of the ISM services prices paid index since early 2023. This has rattled financial markets. On top of this, President-elect Trump doubled down on his tariff talk in a wide-ranging speech on Tuesday evening, eroding hopes that he will tread a more cautious path."

There are no major UK data points due, but in the US the ADP report for December is scheduled for release at 1315 GMT while the FOMC’s December minutes will be out at 1900 GMT.

Brooks said: "Ahead today, FOMC minutes and the US ADP employment report will be worth watching. The market mood is priced for a hawkish reading of tonight’s Fed minutes. We expect them to show a balance of risks to inflation and the labour market, and to double down on their gradual approach to rate cuts. If we are correct, then it may temper some of the selloff in the Treasury market."

In corporate news, oil major Shell announced that results for the fourth quarter were significantly lower than the preceding three months, as it revealed $700m of well-write offs and a $1.3bn hit to cashflow.

The company also cut its liquefied natural gas production guidance for the three months to 30 December to 6.8-7.2m metric tons, from earlier estimates of 6.9-7.5m tons.

Safety equipment maker Halma said chief financial officer Steve Gunning has decided to retire at the end of March.

Independent non-executive director Carole Cran has been appointed CFO-designate with immediate effect and will succeed Gunning.

Cran was most recently CFO of Forth Ports and before that, in the same job at Aggreko.