London pre-open: Stocks seen down ahead of services PMI

(Sharecast News) - London stocks were set to edge down at the open on Wednesday following a negative session in the US, as investors eye the latest reading on the UK services sector. The FTSE 100 was called to open 10 points lower at 7,399.

CMC Markets analyst Michael Hewson said: "Equity markets spent most of yesterday on the back foot over US House Speaker Nancy Pelosi's trip to Taiwan which prompted a counter response from China, in the form of the announcement of drills and live fire military exercises in the Taiwan Straits over the next two days.

"US markets also struggled for gains as treasury yields rebounded strongly after a succession of Fed Presidents pushed back on the idea that the Fed was about to go soft on further aggressive rate rises.

"This soft finish in the US and a cautious Asia session looks set to translate into a slightly weaker European open."

On the data front, all eyes will be on the S&P Global/CIPS services PMI for July due at 0930 BST, which is expected to have eased to 53.3 from 54.3 the month before.

In corporate news, house builder Taylor Wimpey said it expected full-year profits to be at the upper end of forecasts as it reported a rise in interim earnings, driven by strong selling prices.

The company said pre-tax profits rose 16.3% to £334.5m.

"Looking ahead, we expect full-year group operating profit to be around the top end of the current market consensus range driven by strong average selling prices on completions that are expected to be 4-5% higher than last year," the company said.

Engine manufacturer Rolls-Royce said the Spanish government had approved the sale of its ITP Aero subsidiary to a consortium of investors led by Bain Capital Private Equity.

Rolls-Royce stated the government's sign-off on the deal follows the receipt of approval from all other relevant regulatory authorities. As a result, completion of the transaction, at an enterprise value of approximately €1.8bn, was expected to take place in the coming weeks.