London pre-open: Stocks to start lower after Chinese PMI data

LONDON (ShareCast) - (ShareCast News) - Investors were expected to focus on global manufacturing data and central bank talk on Wednesday after US stocks struggled to find their footing in the previous session. The Footsie was being called to start the day lower by 53 points to 5,882.

As of 07:32 the Shanghai Stock Exchange's Composite Index was trading lower by 1.71% to reach 3,131.33 following the release of weaker-than-expected survey data on Chinese manufacturing overnight.

Nonetheless, some market commentary said expectations were for stockmarkets to be relatively calm during the visit to the US by the country's premier Xi Jinping.

Caixin's preliminary Chinese manufacturing sector purchasing managers' index for September dipped to a reading of 47.0 for September - a 78-month low - down from a print of 47.3 for August. The median projection from economists had been for a reading of 47.5, figures released on Wednesday morning showed.

Against that backdrop, all eyes were set to be on European Central Bank president Mario Draghi's appearance before the European parliament's Economic and Monetary Affairs Committee, at 14:00 BST, given recent speculation surrounding the potential for further monetary stimulus in the euro area.

The Bank of England's Broadbent was scheduled to take to the podium later in the day at 17:00 BST, followed by the president of the US Federal Reserve bank of Atlanta (BSE: ATLANTA.BO - news) , Dennis Lockhart, at 17:30BST.

In terms of economic data, it was expected that markets' attention would centre on the latest Eurozone manufacturing and service sector PMIs and any signs of a slowdown or that recent financial market volatility had left an imprint on levels of activity.

Smiths Group (Other OTC: SMGKF - news) names new boss Diversified engineering company Smiths Group posted a 3% rise in full-year pre-tax profit despite a drop in revenue. For the year ended 31 July, pre-tax profit was up 3% from last year at £459m, but revenue slipped 2% to £2.90bn. The company said it saw growth in Smiths Medical and Flex-Tek, but difficult end markets in John Crane, Detection and Interconnect pushed down overall revenues. In a separate statement, the company said that chief executive Bowman will step down at the close of business on 24 September and will remain on garden leave as an employee until the expiry of his notice period on 31 December. Smiths had announced in December of last year that Bowman wanted to resign. Smiths said Andrew Reynolds Smith has been appointed as an executive director and as chief executive with effect from 25 September.

United Utilities (LSE: UU.L - news) has announced group revenue for the six months to 30 September is likely to remain flat. The group released a trading update on Wednesday, and said the impact of lower regulated revenue is offset by slightly higher non-regulated sales. Profit for the period is also due to dip lower than a year ago due to customer compensation and one-off costs to the tune of £25m after a water quality incident. However the statement said the lower profit is in line with management expectations.

Adverse exchange rate movements will hit Diageo (LSE: DGE.L - news) 's 2016 operating profits by £150m as demand for premium spirits is impacted in emerging markets, although stronger volume growth was expected to offset that over the medium-term. Management said that: "Therefore while currencies are weaker in these markets, we continue to believe that stronger volume growth in 2016 will lead to improved top line performance and that we can deliver modest organic margin improvement. As we achieve our productivity gains, from 2017 we expect to deliver mid-single digit organic top line growth on a sustained basis and operating margin expansion of 100 basis points over three years (Other OTC: UBGXF - news) . "