(Alliance News) - Stocks in London are set to edge into the red at Wednesday's open, as investors take their cue from downbeat trading in Asia after economic data pointed to a slowdown in China.
IG says futures indicate the FTSE 100 to open down 6.5 points, 0.1%, at 7,513.22 on Wednesday. The index of London large-caps had closed down 7.54 points, or 0.1% at 7,519.72 on Tuesday.
"In the absence of US markets yesterday, European markets underwent a modestly negative session on a fairly quiet day, and look set to open modestly lower this morning, with Asia markets drifting lower," noted CMC Markets analyst Michael Hewson.
Financial markets in the US were closed on Tuesday for Independence Day.
In Asia on Wednesday, sentiment was hurt by the latest PMI data, which suggested China's economic recovery was weakening.
The Caixin services purchasing managers' index eased to 53.9 points in June from 57.1 in May. Falling closer to the 50-point no-change mark, it shows growth slowed in the sector.
In China, the Shanghai Composite was down 0.5%, while the Hang Seng index in Hong Kong was down 1.3%. The S&P/ASX 200 in Sydney was down 0.3%.
"Policymakers are unlikely to sit idle and will likely redouble policy efforts to support domestic demand and, more importantly, boost confidence, which has been in the dumps lately. Without policy support, there's a risk that weakening growth expectations could become self-fulfilling," said SPI Asset Management's Stephen Innes.
The Nikkei 225 index in Tokyo was down 0.5%, with Japanese economic data also confirming a slowing trend across Asia.
The au Jibun Bank services PMI fell to 54.0 points in June, from a series record of 55.9 in May - signalling a solid, but slower, expansion in activity.
Brent oil was trading at USD75.89 a barrel early Wednesday, down from USD76.13 at the time of the European equities close on Tuesday.
There will be the minutes from the latest Federal Open Market Committee meeting at 1900 BST.
"Tonight's minutes may offer up further clues as to the Fed’s thinking when it comes to why they think that two more rate hikes at the very least will be needed by the end of this year," CMC's Hewson noted.
The Federal Reserve had voted to keep interest rates unchanged at its June meeting.
The dollar was stronger in early exchanges in Europe ahead of the minutes.
Sterling was quoted at USD1.2713 early Wednesday, lower than USD1.2728 at the London equities close on Tuesday. The euro traded at USD1.0876, lower than USD1.0900. Against the yen, the dollar was quoted at JPY144.59, up versus JPY144.46.
Gold was quoted at USD1,926.40 an ounce early Wednesday, slightly lower than USD1,927.60 on Tuesday.
In Wednesday's UK corporate calendar, there are full-year results from Supreme, AO World and Quiz, as well as third-quarter results from Topps Tiles.
The economic calendar has a slew of services PMI prints, including from the EU, Germany, UK and France.
By Elizabeth Winter, Alliance News senior markets reporter
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