London pre-open: Stocks seen higher ahead of services PMI
London stocks were set to rise at the open on Wednesday following a positive Asian session, as investors eye the latest reading on the UK services sector.
The FTSE 100 was called to open 15 points higher at 7,120.
CMC Markets analyst Michael Hewson said: "Concerns that rising infection rates across Asia, and in China especially, appear to be causing anxiety that the rebound story in that part of the world is about to become the weakest link in the global recovery story.
"Not only are we hearing about more cases in China, but we are also getting an acceleration of cases across Indonesia and Thailand, as the virus hunts out the parts of the global economy with low vaccination rates.
"This hasn’t as yet been reflected in some of the more recent economic data out of China, with this morning’s latest Caixin services PMI for July showing a rebound in economic activity to 54.9, after slowing to 50.3 in June.
"There appear to be fewer concerns about economies in Europe, where vaccination levels are higher, although we are seeing some signs that economic activity may have peaked in the short term, with markets here looking set to open higher."
On the data front, Markit's services PMI for July is at 0930 BST.
In corporate news, Rolls-Royce has signed an agreement to sell its Bergen Engines medium speed liquid fuel and gas engines business to global engineering group Langley Holdings for an enterprise value of €63m.
The deal is part of the aircraft engine-maker’s plan to generate at least £2bn from disposals. Sale proceeds of €70m from the transaction together with €40m of cash currently held within Bergen Engines, which Rolls will keep, will be used to help rebuild the company’s balance sheet.