London pre-open: Stocks seen up ahead of PMIs

London stocks were set to rise at the open on Monday as investors eye the latest reading on the UK services and manufacturing sectors.

The FTSE 100 was called to open 32 points higher at 7,120.

CMC Markets analyst Michael Hewson said: "Last week European stocks saw their biggest weekly decline since February, despite a Friday rebound that was prompted by comments from Dallas Fed President Robert Kaplan who suggested any Delta setbacks would mean he might adjust his views on a taper.

"A large part of the reason behind last week’s change in sentiment was increasing concerns over a slowing global economy, as well as increasing angst over rising infection rates and vaccine durability. We also had to contend with China looking to pour sand in the wheels of its own recovery story with a crackdown on various sectors including tech and luxury.

"While it’s been accepted wisdom that discussions on a taper are likely to start soon, with a slowdown in purchases starting sometime in Q4, it's hard to imagine that the Fed would start down that road if the economic outlook deteriorated. Furthermore, talking about a taper is one thing, it certainly doesn’t mean that we’re about to see the start of one, as Kaplan’s Friday comments illustrate.

"With US treasury yields also subdued, bond markets certainly aren’t expecting an imminent move in that regard, with today’s European open expected to be a positive one after Friday’s decent US close, and a positive start to the week in Asia this morning."

On the macro front, Markit’s services and manufacturing PMIs for August are due at 0930 BST.

In corporate news, WPP said it had bought Satalia, a technology company offering artificial intelligence solutions for clients, for an undisclosed sum .

Satalia’s clients include BT, DFS, DS Smith, PwC, Gigaclear, Tesco and Unilever. The company builds technologies that helps clients change their business strategies and improve operational efficiency, WPP said.

Elsewhere, Mitie said it had agreed to sell its document management business to Swiss Post Solutions (SPS) for £40m.

The business delivered revenue of £48m and an EBITDA of £4.2m for the twelve months to 31 March 2021.