London pre-open: Stocks seen muted; services PMI in focus
London stocks were set for a muted open on Wednesday as investors continued to watch out for any news on a possible US stimulus package.
The FTSE 100 was called to open four points lower at 6,032.
CMC Markets analyst David Madden said: "Traders were paying close attention to US politics as Republicans and Democrats were still negotiating the terms of the coronavirus relief package. The political wrangling has been going on for over one week, but dealers are still a little optimistic than an agreement will be reached.
"Nancy Pelosi, the Speaker of the House of the Representatives, said she does not expect an agreement to be achieved this week. It was reported that talks have been productive, so that has been keeping the bulls engaged."
Meanwhile, souring relations between the US and China were also likely to remain in focus. "Beijing has been encroaching on Hong Kong’s autonomous status and that has attracted the anger of the US government amongst others," said Madden. He also pointed to US President Donald Trump’s decision to ban Chinese video-sharing app TikTok.
"The Donald is concerned about national security, and that is the motivation behind the move. Microsoft have held talks to acquire TikTok’s US unit, and President Trump said he would only approve the deal if Microsoft pays a cut of the acquisition price to the US Treasury," he said.
On home shores, all eyes will be on Markit’s services PMI for July at 0930 BST.
In corporate news, Legal & General left its interim dividend unchanged as the insurer reported a 73% decline in first-half profit caused by low interest rates and investment losses.
Pre-tax profit fell for the six months to the end of June fell to £285m from £1.1bn. Operating profit fell 6% to £946m. The FTSE 100 company proposed a first-half dividend of 4.93p a share - the same as a year earlier.
Bookmaker William Hill reported an underlying first-half loss as revenue slumped following the cancellation of sporting events due to the coronavirus pandemic and announced 119 shops would not reopen after the lockdown.
The gambling company posted pre-tax profits of £148.5m in the six months to June 30 compared with a loss of £38.1m a year ago thanks to a £200m sales tax refund. Revenue fell 32% to £544.4m reflecting the lack of sports to bet on.
Adjusted pre-tax losses came in at £14.2m, swinging from a profit of £50.8m in 2019.