London pre-open: Stocks seen lower despite fresh Wall St highs

London stocks were set to fall at the open on Tuesday despite fresh highs on Wall Street.

The FTSE 100 was called to open 15 points lower at 7,285.

CMC Markets analyst Michael Hewson said: "Markets in Europe got off to fairly subdued start to the week yesterday, while US markets once again finished in the green, with the Dow setting a new record high, after some big gains for US construction giant Caterpillar, which was boosted after US lawmakers finally signed off on a new $1trn infrastructure bill. The new funds are expected to be used to improve roads, bridges, and other transportation projects, as well as upgrading broadband infrastructure.

"Some of the edge was taken off the positive mood just as markets were closing by the Federal Reserve who warned that prices of risky assets were becoming vulnerable to significant declines in its latest financial stability report.

"As a result, today’s European market open looks set to be a slightly negative one, with the main focus today on the latest Germany ZEW expectations survey which last month hit a 20-month low, and looks set to weaken further in November, from 22.3 to 20. The latest Germany trade numbers are also expected to point to weakness in its exports to China.

"We also have the latest US PPI numbers for October, which are likely to be a leading indicator for tomorrow's CPI report."

In corporate news, Primark owner Associated British Foods said it expected "significant progress" in the current year as it reported a rise in annual profits but warned that food prices may have to rise due to increasing costs.

The company reported a rise in pre-tax profit of £725m from £686m a year ago.

"We are seeing significant cost increases in energy, logistics and commodities in addition to the impact of widely reported port congestion and road freight limitations. Our businesses are working to offset the impact of these through cost savings. Where necessary, our food businesses will also implement price increases," the company said.

It also declared a special dividend of 13.8p a share along with a final dividend of 20.5p a share.