LONDON (Alliance News) - London shares are set to open flat Wednesday, ahead of a flurry of Purchasing Manager's Index readings from European countries and the UK, which analysts expect to be positive.
Services and Composite PMI readings from France, Germany and the eurozone are expected at 0850 BST, 0855 BST and 0900 BST, respectively. Meanwhile, the Services PMI reading for the UK is due at 0930 BST.
"The services sector, in general, hasn?t fared as badly as manufacturing so the figures should be much more positive and point to strong growth expectations in most cases," says Oanda analyst Craig Erlam.
"The UK figure in particular is expected to remain very high at 58.1, which is important given both the country?s dependency on the sector to provide more than two thirds of economic output and because other sectors are not pulling their weight," writes Erlam.
Meanwhile, Lloyds Bank notes that the eurozone's preliminary services PMI reading for July signalled a further moderate gain in output on the month.
"Although the final estimate is expected to be unchanged at 53.8, the risks are tilted to the upside following an upward revision to the July manufacturing index, possibly reflecting the last-minute agreement on the Greece bailout programme," says the bank.
IG says futures indicate the FTSE 100 to open 1 point lower at 6,685.30. The index closed Tuesday flat at 6,686.57.
In Asia on Wednesday, the Japanese Nikkei 225 trades up 0.7%. In China, the Hang Seng is up 0.2% and the Shanghai Composite is down 2.0%.
In the US, as the earnings season comes to an end, the possibility of a US rate hike by the US Federal Reserve in September is starting to be the centre of the market's attention.
In this context, President of the Federal Reserve Bank of Atlanta Dennis Lockhart has said the economy is ready for its first increase in short-term rates. He added it would take a significant deterioration in economic data to convince him not to push for a rate hike in September, The Wall Street Journal reported.
Lockhart, speaking in an interview with the WSJ, said: "I think there is a high bar right now to not acting, speaking for myself."
Lockhart is among the first officials from the Federal Reserve to speak publicly since the US central bank's policy meeting last week, when it dropped new hints that a rate increase is moving closer on the horizon.
Wall Street ended lower Tuesday. The DJIA closed down 0.3%, while the S&P 500 and the Nasdaq Composite finished down 0.2%.
Also in the economic calendar, in the US, Markit Services and Composite PMI readings are due at 1445 BST. The US Institute for Supply Management Non-manufacturing PMI is due at 1500 BST, while EIA crude oil stocks are expected at 1530 BST
In the UK corporate calendar Wednesday, Legal & General Group, London Stock Exchange Group, Unite Group, SOCO International, Statpro Group and Spirax-Sarco Engineering release half-year results at 0700 BST. Standard Chartered and Stanley Gibbons Group publish half-year results at 0915 BST.
By Daniel Ruiz; danielruiz@alliancenews.com
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