London pre-open: Stocks seen lower on weak US, Asian cues
London stocks were set to fall at the open on Tuesday following downbeat sessions in the US and Asia.
The FTSE 100 was called to open 11 points lower at 7,522.
CMC Markets analyst Michael Hewson said: "Yesterday’s surge in the US dollar to new 20-year peaks against the euro, appears to suggest that investors are becoming increasingly concerned that the Federal Reserve may well not pivot on monetary policy next year.
"It’s almost as if markets have got so conditioned to the Fed riding to the rescue that it’s hard to envisage them not doing so this time, however yesterday’s slide in US markets could be the gradual realisation that this time is different, as they posted their worst day since June, and yields rose sharply.
"Now markets appear to be starting to price in the prospect that inflation may well be higher for longer, although the continued surge in natural gas prices yesterday has also helped. It is becoming ever clearer that prices are likely to remain higher for longer, and if indeed that turns out to be the case, that means rates are likely to be higher for longer.
"These concerns also saw European markets close sharply lower yesterday, with surging natural gas prices adding to the angst, after Gazprom announced it will once again be closing Nord Stream One for “maintenance” for 3 days at the end of the month. This closure is once again raising concern that this could happen on a more regular basis as the weather gets colder."
On the macroeconomic front, the S&P Global/CIPS manufacturing and services PMIs for August are due at 0930 BST.
In corporate news, BT said the UK government will not be taking any action over French billionaire and Altice owner Patrick Drahi’s stake in the telecoms group.
Drahi increased his stake in BT in December 2021 to 18% from 12.1% through Altice, making him the biggest shareholder. This prompted the UK government to review the investment on the grounds of national security.
However, BT said on Tuesday that the Secretary of State for Business, Energy and Industrial Strategy has decided to take no further action in relation to the investment.