London pre-open: FTSE to open lower ahead of manufacturing PMIs

London-listed stocks are expected to start Wednesday's session on the backfoot following downbeat performances from both US and Asian markets overnight and ahead of manufacturing sector readings due out across the globe.

City sources predict the FTSE 100 will open around 13 points lower than yesterday's close of 6,622.72.

"Today we have the latest manufacturing PMI numbers for September [in the UK] and there is a risk that the uncertainty surrounding the Scottish referendum may have prompted a slow down here," said CMC chief market analyst Michael Hewson.

"As it was, in August, we saw manufacturing activity slump to a 14-month low at 52.5, though expectations for the September number today are for a modest uptick to 52.7."

Manufacturing PMI data will also be released from Spain, Italy, France and Germany, with Spain and Germany predicted to come in at 52.3 and 50.3 respectively.

"It is the second and third biggest economies in Europe in France and Italy that are the cause for the biggest concern, hobbled by vested interests and political paralysis, as economic activity continues to decline with figures of 48.8 and 49.5 expected to show contraction in September," continued Hewson.

"Politicians in both these countries continue to abrogate their responsibilities imploring the European Central Bank (ECB) to do more despite the fact that the euro is over 9% off its highs this year, and interest rates are at record lows."

Earlier this morning China's national bureau of statistics released its official manufacturing sector purchasing managers' index, which came in at 51.1, as expected.

Those figures prompted economists at Capital Economics to write that: "Today's official PMI suggests the while conditions have held up better than many had expected on the back of healthy foreign demand, the cooling continued to weigh on economic activity and import demand.

"[...] the PMIs also show that domestic demand remains subdued and that the cooling property sector continues to be a drag."

In company news, Tesco has been notified by the financial regulator that a full investigation has begun into its recent profit overstatement. The Financial Conduct Authority (FCA) notified the FTSE 100 grocer that it will look into its £250m overstatement of expected profit for the half year, alongside the "independent" review by Tesco's accountants Deloitte. Tesco said it will continue to co-operate fully with the FCA and other relevant authorities considering the matter.

Second quarter numbers from Sainsbury were better than expected, with like-for-like sales down 2.4% as competitive forces in the grocery market accelerated. Like-for-like sales for the first six months of the year have therefore fallen 2.1% and the company expects this to be roughly repeated in the second half. Total retail sales for the second quarter were down 0.8% excluding fuel, meaning total retail sales for the first half were flat excluding fuel.

Building merchant Grafton Group has completed the acquisition of Brussels-based Gedimat-Ginion. Grafton said the addition expands and complements its coverage of the Brussels market following the acquisition earlier this year of Mpro.