London pre-open: Stocks seen muted ahead of services data
London stocks were set for a muted open on Monday following heavy losses in Asia, as investors awaited the latest reading on the UK services data, while US mid-term elections and the Fed's interest rate decision later in the week will also be eyed.
The FTSE 100 was called to open one point higher at 7,095.
London Capital Group analyst Jasper Lawler said: "Whilst October’s wild volatility is now the rear-view mirror, traders will be hoping for equity markets to return to a more stable footing over the coming month. However, this could be wishful thinking given the risk events on tap.
"The headline risk this week is the US mid-term elections, where the Democrats are widely expected to flip the House of Representatives. The resultant political deadlock could weigh on US indices and the dollar alike. This is a huge risk event for the market. We expect to see investors selling out of positions and taking risk off the table ahead of the midterm elections on Tuesday.
"The mid-term elections will be running to a backdrop of trade war tensions. The Dow put in a late rally on Friday, on hopes of a US – Sino trade deal, closing above session lows. However, optimism of a trade war resolution faded again over the weekend, putting Asian markets on the back foot as trading started for the new week. Europe however is moving higher, led by a charge in the Dax, whilst the FTSE is lagging behind on the stronger pound."
On the data front, Markit's services purchasing managers' index for October at 0930 GMT is expected to have slipped to 53.3 from 53.9 the month before.
In corporate news, ITV has lured Chris Kennedy from Micro Focus International to be the broadcaster's new chief financial officer from 1 February. Kennedy has a strong background in media from his 17 years at EMI and has since been CFO of three FTSE 100 companies.
Micro Focus, meanwhile, appointed Brian McArthur-Muscroft from Paysafe as a replacement CFO and issued a short trading statement to the effect that full year revenue will be towards the upper end of its previously guided range. The software group said trading had improved in the second half of the year, with EBITDA margins at 37% as indicated.
Specialist insurer Hiscox said gross written premiums increased by 14.3% to $3.04bn in the first nine months of the year, but added that there had been more claims in the third quarter from US Hurricanes Florence and Michael and Typhoons Jebi and Trammi, which hit Japan.
Hiscox also saw a number of larger individual claims in big-ticket and retail businesses, including a large marine loss of $13m, while the UK & Ireland saw an uptick in subsidence claims following a particularly dry summer, as well as a continuation of escape of water claims.