London pre-open: Stocks seen flat as investors keep an eye on Middle East

The FTSE 100 was called to open unchanged at 7,402.

CMC Markets analyst Michael Hewson said: "Events over the weekend have offered some hope of compromise with the release of two Israeli hostages, and the start of some aid convoys into Gaza, prompting some modest weakness in crude oil and gold prices, however the exchange of fire between Israel and Hamas has continued, while the prospect of a new front on the Lebanese border remains an ever-rising concern as Israeli forces exchange fire with Hezbollah.

"How much longer this market weakness can continue could well come down to events later this week and which may not be connected to events in the Middle East, with the release of the latest quarterly earnings from 4 of the so-called “Magnificent 7” which have helped to underpin the bulk of the gains in the Nasdaq 100, given that collectively they still account for 40% of the indexes market cap.

"With Google owner Alphabet, Microsoft, Amazon and Facebook owner Meta Platforms all reporting this week the scope for a further lurch lower is high in the event of any sort of disappointment. Complicating matters further is the fact that even if the numbers a good an escalation in the Middle East could open the trapdoor to further losses."

In UK corporate news, addiction treatment drug maker Indivior said it has agreed to pay $385m to resolve the final lawsuit claims against it in the long-running Suboxone anti-trust case.

The company, which makes anti-opioid treatments, said it would also take a $228m charge in the third quarter, which will be excluded from adjusted earnings.

"This charge represents the additional amount above the current remaining provision of $157m for the antitrust multi-district litigation, which reflects the previously announced settlement agreements with the States and End Payors," Indivior .

A trial that was scheduled to start on October 30 has been cancelled, it added.

Semiconductor group Alphawave IP has poached Avantus' chief financial officer as its new CFO, after its previous finance chief resigned abruptly five months ago.

Alphawave IP, which trades as Alphawave Semi, is appointing Rahul Mathur to the board as of 30 October.

Mathur has served as CFO of clean energy company Avantus since 2021 and senior vice president of finance of semiconductor group Rambus from 2016 to 2021.

Keller Group said in a trading update on that it was on track for a record year, with expectations of full-year underlying operating profit now ahead of market forecasts.

The geotechnical engineer said that while North America performed well with more robust pricing and operational improvements, Europe faced challenges due to a competitive pricing environment, impacting profitability.

In the Asia-Pacific, Middle East, and Africa region, Keller Australia was strong, but some projects were delayed, requiring resource redeployment. The company said its cash generation was considerably ahead of last year, leading to a lower net debt-to-EBITDA leverage ratio within its target range.