London pre-open: Stocks seen touch higher ahead of services PMI
London stocks were set for a slightly firmer open on Tuesday following losses in the previous session amid worries about North Korea, as investors eyed the release of services data.
The FTSE 100 was expected to open eight points higher at 7,419.
CMC Markets analyst Michael Hewson said: "Flare-ups on the Korean peninsula are fast becoming a weekly occurrence and while financial markets remain nervous about the potential for the next dangerous conflagration, each escalation on the part of North Korea seems to elicit a milder market reaction than the previous one.
"It’s almost as if what has been unfolding on the Korean peninsula in recent weeks is desensitising markets and becoming more like background music for investors, with an occasional ramping up of the bass, the only reminder that a wider crisis or conflict could take hold quite quickly."
Markit's services purchasing managers' index is at 0930 BST.
Hewson said: "In July we saw a nice uptick to 53.8, after a bit of a slowdown in June, and it is expected that we might see some softening in August back to 53.5, though it wouldn’t be a surprise if we did outperform, particularly in areas that support travel, leisure and tourism."
In corporate news, Aveva has agreed a merger with the software arm of France's Schneider Electric where the UK company's existing shareholders will own 40% of the business.
As part of the deal, which is being structured as a reverse takeover, £550m of cash contributed by Schneider Electric and £100m excess cash on Aveva's balance sheet will be paid out to existing shareholders of the FTSE 250 company at completion, representing a total of roughly 1,014p per share.
Infrastructure and support services company Stobart Group updated the market on its trading in the first half on Tuesday, reporting good progress in aviation as passenger numbers grew 22% year-on-year at Southend Airport.
The company said it was on track to deliver EBITDA on its rail and civil engineering projects for the six months to 31 August, with its infrastructure and investment arm benefiting from a “significant uplift” in value of around £120m and cash generating of £113m following the partial disposal of its stake in Eddie Stobart Logistics.
In energy, delays in the commissioning of “certain third party biomass stations” impacted short-term volumes, though EBITDA was said to be ahead of target.