London pre-open: Stocks seen muted amid US debt deal hopes

London stocks were set for a muted open on Tuesday as traders return to their desks after the long weekend, amid hopes of a US debt deal.

The FTSE 100 was called to open unchanged at 7,627.

CMC Markets analyst Michael Hewson said: "With both the US and UK markets closed yesterday, there was a rather tepid response to the weekend news that the White House and Republican leaders had agreed a deal to raise the debt ceiling, as European markets finished a quiet session slightly lower.

"The deal, which lays out a plan to suspend the debt ceiling beyond the date of the next US election until January 1st 2025, will now need to get agreement from lawmakers on both sides of the political divide to pass into law. That could well be the hardest part given that on the margins every vote is needed which means partisan interests on either side could well derail or delay a positive outcome.

"A vote on the deal could come as soon as tomorrow with a new deadline of 5th June cited by US Treasury Secretary Janet Yellen.

"US markets, which had been rising into the weekend on the premise that a deal was in the making look set to open higher when they open later today, however markets in Europe appear to be less than enthused.

"That’s probably due to concerns over how the economic recovery in China is doing, with recent economic data suggesting that confidence there is slowing, and economic activity is declining."

In corporate news, Unilever announced that chief financial officer Graeme Pitkethly plans to retire by the end of May 2024.

The consumer goods giant said the board will now proceed with a formal internal and external search for his successor.

Specialist international distribution and services group Bunzl said it had bought safety businesses in Brazil and Spain, taking its acquisitions total to 200 since 2004.

The company said it had signed an agreement to buy Leal Equipamentos de Proteção, a specialised safety distributor in Brazil. Completion of the acquisition is subject to competition authority clearance.

It also bought Irudek, a distributor of safety and personal protective equipment, specialising in fall protection equipment in Spain. No financial details were disclosed for either deal.