London pre-open: Futures higher amid hopes for deal between Brussels and Rome

Stocks are set for a higher start amid reports that Italy's government might make some concessions on its budget plans, which is helping to dampen concerns of a dust-up between Brussels and Rome which could have negative knock-on effects much further afield.

According to Italian daily, Corriere della Sera, officials in Rome will offer to reduce the country's budget deficit as a proportion of gross domestic product in 2020 and 2021, to 2.2% and 2.0%, respectively, but hold the line on next year's expected shortfall of 2.4%.

Against that backdrop, the Footsie was being called to start the session higher by six points to 7,481, alongside gains for the pound of 0.22% to 1.30075 versus the US dollar. On the other hand, Sterling was dipping by 0.14% against the euro to 1.1224.

Overnight, the Dow Jones Industrials had notched-up a fresh record high, even as the tech-heavy Nasdaq Composite and the small-cap focused Russell 2000 dipped.

Commenting on the news out of Italy on Wednesday morning, Jasper Lawler, head of research at LCG, said: "Italy's already high debt pile would increase significantly under Italy’s original budget intentions. However, plans going forward to bring the deficit under control and avoid another debt crisis has boosted risk appetite across the globe.

"This is by no means the end of this tale, which is why the FTSE MIB is looking to a slower start that its European peers and gains in the euro could be capped. However, the odds of a happy ending have improved. Brussels still need to approve Italy’s budget plans by the middle of the month, so we could still see some jitters until the ink has dried on that approval."

Back in the UK, traders were waiting on a reading on UK services sector activity in September, at 0930 BST, courtesy of IHS Markit.

They were also expectant ahead of the final day of the Conservative party's annual conference with all eyes on Theresa May amid Westminster's continuing to win over the DUP for its support to its plans for an Irish backstop.

It was a similar story overseas, with services PMIs scheduled for release in the euro area, at 0900 BST, and in the US, at 1500 BST.

Markets will also be keeping close tabs on a raft of Fed speakers who are scheduled to take to the podium throughout the afternoon.

They include Richmond Fed president Thomas Barkin at 1505 BST, the Cleveland Fed's Loretta Mester at 1705 BST, Fed Governor Lael Brainard at 1900 BST and chairman Jerome Powell at 2100 BST.

Tesco profits fall short of consensus

Tesco reported a 42% increase in first-half profits as sales accelerated in the second quarter and the March acquisition of Booker contributed to faster growth. Group sales increased 12.8% to £28.3bn in the 26 weeks to 25 August, with like-for-like sales up 2.2%, with profit before tax and exceptionals up 42.4% to £806m.

Vodafone's Italian arm on Tuesday said it had bought 5G service airwaves for €2.4bn (£2.14bn) in an auction run by the Italian government. The auction raised €6.bn in total for the Italian treasury, which is struggling under a heavy debt burden.

Euromoney Institutional Investor has agreed to sell its Mining Indaba business, which operates the world's largest annual mining investment conference, for £30.1m to ITE Group. For the year ended 30 September 2017, Mining Indaba reported an adjusted operating profit of £2.5m.