London pre-open: Stocks seen slightly weaker; construction PMI eyed

Stocks in London were set for a slightly weaker open on Tuesday following a positive close in the previous session, as the pound continues to struggle.

The FTSE 100 was called to open eight points lower than Monday’s close at 6,975.

On the data front, US construction PMI is at 0930 BST.

CMC Markets’ Michael Hewson said that if the September construction PMI numbers and Wednesday’s services data show robustness similar to Monday’s manufacturing PMI, the outlook for third quarter GDP could well see a significant uptick in estimates.

“The construction sector has been a significant underperformer in the last three to four months, posting sub 50 readings every month since June. Expectations are for a reading of 49.1, slightly down from 49.2 in August.”

In corporate news, it was two out of three for Astrazeneca on Tuesday as a disappointing drug trial was counterbalanced by a win with the NHS drug regulator for one of its big cancer drugs and a licence deal for a beta-blocker medicine.

On the latter deal, Aralez will pay AstraZeneca $175m for the US rights to Toprol-XL tablets and will also pay up to $48m in milestone and sales-related payments, as well as mid-teen percentage royalties on sales, with AstraZeneca continuing to manufacture and supply Toprol-XL and the authorised generic medicine.

Electra Partners announced on Tuesday morning that, following the successful initial public offering of its portfolio company Premier Asset Management Group, it expects to partially realise FTSE 250 firm Electra Private Equity’s investment in the business.

Based on the offer price, Electra's investment in Premier has a value of £46m - an uplift of £13m or 39% on the valuation at 31 March, implying an increase in net asset value per share of 26p.

FTSE 250 infrastructure company Carillion renewed its contract with Nationwide Building Society for a further seven years for £350m, to provide facility management services at its branches and corporate offices.

The contract, which started on 1 October, built on an existing nine year partnership, and will provide facilities management services for the building societies’ Swindon headquarters, 15 corporate offices, data centres and 700 branches across the UK.