London pre-open: Stocks set to edge higher, central banks in focus

(Sharecast News) - Stocks in London were being called to start the day with slight gains following the strong advance seen on Wall Street during the previous session. Commenting on the triggers behind the strength seen in US stocks, Michael Hewson, chief market analyst at CMC Markets UK, cited the strong readings on consumer confidence and new home sales published Stateside on Tuesday.

"If the US economy is starting to struggle then there is little evidence of that in yesterday's numbers, which in turn helped drive a strong finish for US markets, led by the Nasdaq 100," he said.

As of 0728 BST, futures on the FTSE-100 were trading 25 points higher to 7,503.00.

In focus for Wednesday, at 1430 BST the heads of the Bank of England, US Federal Reserve, European Central Bank and Bank of Japan were all due to participate on a panel at the ECB's annual policy-making forum in Sintra, Portugal.

And overnight it was reported that Chinese industrial profits plummeted at a year-to-date pace of 18.8%, following a 20.6% drop in April.

Commenting on the outlook for industrial profits in the Asian giant, Duncan Wrigley, chief China+ economist at Pantheon Macroeconomics, said: "Exports are now falling again, and the H2 global outlook is dismal.

"China is likely to add limited fiscal and quasi-fiscal stimulus to the recent 10bp lending rate cuts, but this will merely keep growth on track for a relatively conservative "about 5%" GDP growth target."

No major economic releases were scheduled in the UK.

Thames Water hits the skids

The UK government has reportedly started drawing up plans to temporarily take beleaguered utility Thames Water back into public ownership amid fears it cannot service its £14bn debt pile a day after its chief executive quit. Local media reported that industry regulator Ofwat and government ministers were holding talks about potentially placing Thames Water into a special administration regime (SAR) similar to that used after the collapse of energy supplier Bulb in 2021.

Diversified Energy said it had sold some of its non-core, non-operated US assets for $40m. The assets include approximately 200 net, non-operated wells producing around 3 million barrels of oil equivalent per day. The deal represents an approximate four times next 12 months cash flow multiple and includes around 85,000 associated net acres located in Oklahoma and Texas.