London pre-open: Stocks seen lower after weak US, European sessions

(Sharecast News) - London stocks were set to fall at the open on Tuesday following losses a day earlier in the US and Europe, as traders returned to their desks after the bank holiday. The FTSE 100 was called to open 12 points lower at 7,415.

CMC Markets analyst Michael Hewson said: "European markets got off to a negative start to the week yesterday with the UK out for the August bank holiday, while US markets also started the week lower, although the losses were fairly modest after Friday's big falls with the S&P500 finding some support just above the 50-day SMA and closing off its lows of the day.

"As we look at the return of UK markets, we can expect to see the FTSE100 open lower as markets here play catch-up, while we'll also get an insight into how higher inflation and interest rates is slowing demand for loans and mortgages in July."

On the macro front, net lending, consumer credit and mortgage approvals data for July are due out at 0930 BST.

Hewson said: "The effect of higher interest rates as well as the rising cost of living has already started to manifest itself in the most recent lending data. It's been a trend that has been in place since the start of this year, but appears to be accelerating as we head into the autumn.

"In June mortgage approvals slipped to their lowest levels in two years, coming in at 63.7k. Having seen a well flagged 50bps rate rise delivered in August and the possibility of another 50bps move at the very least in September, it's likely that we will probably see another slowdown in today's numbers.

"Net consumer credit was more resilient in June, jumping sharply to £1.8bn from £0.9bn in May, however this could be down to consumers loading up on debt to get by as monthly bills increase in size."

In corporate news, Bunzl posted a jump in first-half profit and revenue as product cost inflation and volume growth more than offset the expected decline in Covid-19 related sales.

In the six months to 30 June, adjusted pre-tax profit grew 12.2% to £411.4m, with revenues up 16.1% at £5.7bn.

Dechra Pharmaceuticals said it has bought California-based veterinary pharmaceutical manufacturer Med-Pharmex for $260m (£221.5m).

It said Med-Pharmex is the acquisition referred to in the fundraising announcement it made in July as the "potential acquisition".

Elsewhere, clinical trial results showed that AstraZeneca's Farxiga treatment against Type II diabetes significantly reduced the risk of cardiovascular death or worsening of heart failure in patients with mildly reduced or preserved ejection fraction.

HFpeF is a condition in which the left ventricle of the heart hardens, becoming less able to relax, which in turn provokes higher blood pressure.

The results of the third phase clinical trial were presented at the European Society of Cardiology Congress 2022 on Tuesday, simultaneous to their publication in the New England Journal of Medicine.