London pre-open: Stocks seen lower ahead of services PMI

London stocks were set to fall at the open on Wednesday following strong gains in the previous session, as investors eyed the release of the latest services PMI.

The FTSE 100 was called to open 33 points lower at 7,406.

On the data front, Markit’s services purchasing managers’ index for January is at 0930 GMT.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "Yesterday, the UK construction PMI bettered the already solid expectations in January. Today, the services PMI should confirm a rebound in activity posterior to the December snap election as well.

"So far, we know that the business surveys reacted well to fading political stress and waning no-deal Brexit expectations. How much of this optimism would translate into the headline data such as growth and inflation are what will really matter to the pound. In this respect, the next couple of data points may see limited market reaction if they refer to the pre-election period. Among those, the fourth quarter growth and December production data due next Tuesday."

More broadly, investors will continue to keep an eye out for any news on the coronavirus, with more than 24,000 confirmed cases and the death toll rising to 490.

In UK corporate news, paper and packaging group Smurfit Kappa reported a rise in full-year core earnings and revenue as it benefited from its capital spend programme and recent acquisitions.

In the year to the end of December, earnings before interest, tax, depreciation and amortisation rose 7% to €1.65bn while revenue ticked up more than 1% to €9.05bn.

Private rental sector company Grainger said the recent UK General Election result had driven improved housing market sentiment.

In a trading update for the four months to January 31, the company reported strong overall rental growth of 3.5%, 3% like-for-like rental growth on its private rental sector homes and annualised rental growth of 4.5% on regulated tenancy rental reviews.