London pre-open: Stocks seen up on positive Asian cues; manufacturing PMI eyed

London stocks were set to rise at the open on Monday following a positive session in Asia, as investors eye the latest manufacturing reading.

The FTSE 100 was called to open 37 points higher at 7,069.

CMC Markets analyst Michael Hewson said: "Last week Asia markets saw big declines due to a regulatory crackdown in China, with the Nikkei more or less trading near to its lows this year and the Hang Seng trading at a nine-month low. The extent of the falls appeared to prompt a partial backtrack, or softening of tone by the Chinese authorities prompting a little bit of a rebound which appears to have continued today in Asia.

"This looks set to translate into a positive open for European markets as we look ahead to a big week of economic data."

On the data front, Markit’s manufacturing PMI for July is due out at 0930 BST. Hewson said the PMI is expected to have slowed to 60.4 from 63.9 in June, largely due to disruptions caused by staff shortages, and interruptions to supply chains due to a rise in infections and workers self-isolating.

"Input costs are also rising, raising some concern that price rises could become more persistent and act as a brake on consumer confidence," he added.

In corporate news, HSBC said it would reinstate dividends after first-half profits more than doubled as an ongoing restructuring and pivot to Asia continues to pay off.

Reported profit before tax rose $6.5bn to $10.8bn. The bank said it pay an interim dividend of 7 cents a share after UK regulators last year ordered banks to suspend payouts amid the coronavirus pandemic.

SSE has agreed to sell its entire 33.3% stake in gas distribution operator Scotia Gas Networks (SGN) to a consortium comprising existing SGN shareholder Ontario Teachers' Pension Plan Board and Brookfield Super-Core Infrastructure Partners, for £1.23bn in cash.

The company initially acquired a 50% equity share in SGN in 2005 for a total of £505m, before selling a 16.7% stake to a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA) in 2016, which the consortium is also buying. SGN includes Scotland Gas Networks and Southern Gas Networks, two of the eight regulated gas distribution networks in Britain, as well as SGN Natural Gas, which provides gas to the west of Northern Ireland.