London pre-open: Stocks seen slightly lower as investors eye services data

Stocks in London were set for a slightly weaker open on Wednesday as investors eyed the release of services data.

The FTSE 100 was called to open 12 points lower than Tuesday’s close at 7,062.

Investors in Europe will get their first chance to react to a press report after the close on Tuesday that the European Central Bank was reaching a consensus to start tapering its asset-buying programme.

According to Bloomberg, the ECB will start winding down the asset purchases ahead of the programme’s end in March next year.

On the data front, UK services PMI is at 0930 BST. In the US, the ADP employment report is at 1315 BST, while ISM non-manufacturing and industrial new orders are at 1500 BST.

CMC Markets’ Michael Hewson said: “A decent September construction survey, following on from a bumper manufacturing PMI number on Monday has raised the prospect that, despite the slowdown in the lead up to, and post Brexit, that the UK economy is picking up steam again.

“If today’s services PMI report is similarly positive then it could well be argued that the Bank of England acted prematurely when they slashed interest rates and added to QE in August. Expectations are for an expansion of 52.1, down slightly from 52.9, however if manufacturing and construction are any guide we could see an upside surprise.”

In corporate news, Tesco reported much improved sales and operating profits in the first half of the year, though its pension deficit has grown to a whopping £6bn due to lower bond yields.

As group sales grew 3.3% to £24.4bn in the 26 weeks to 27 August, UK like-for-like sales improved to 0.6% from the 0.3% in the first quarter, while operating profits rose 38.4%.

Centamin announced preliminary production results for the quarter to 30 September from its Sukari Gold Mine in Egypt on Wednesday, with preliminary total gold production of 148,674 ounces, a 6% increase on the previous quarter and a 41% increase year-on-year.

The FTSE 250 firm said quarterly throughput at the process plant was 2,806kt, a 4% decrease on the previous quarter and in excess of its base case target rate of 11 million tonnes per annum.

Open pit total material movement increased 7% on the previous quarter to 16,191kt, and open pit ore production decreased by 14% to 2,936kt at an average mined grade of 1.06g/t.

Jersey incorporated investment company 3i Infrastructure announced it had invested €6.5m in a motorway in the Netherlands.

The FTSE 250 company has invested in the A27/A1 public private partnership motorway project between the Utrecht North Eemnes junction and the Bunschoten-Spakenburg interchange, as part of the 3Angle BV consortium, which also includes Heijmans Capital and Fluor Infrastructure.