LONDON MARKET PRE-OPEN: Shell To Proceed With LNG Canada; UK PMI Due

LONDON (Alliance News) - Stocks in London are set to open lower on Tuesday amid political uncertainty in Europe and soft trading in Asia overnight.In focus on Tuesday is the latest UK construction Purchasing Managers' Index reading for September, due at 0930 BST, which is forecast to dip slightly from August.In early company news, Ferguson reported a rise in annual revenue though profit dipped, while Royal Dutch Shell took a final investment decision on LNG Canada and airlines Ryanair and Wizz Air both saw passenger numbers grow in September.IG says futures indicate the FTSE 100 index of large-caps to open 27.57 points lower at 7,468.10 on Tuesday. The FTSE 100 index closed down 0.2%, or 14.53 points, at 7,495.67 on Monday."European markets underwent a mixed start to the week and Q3 yesterday with fairly decent gains for the German DAX, however the FTSEMib remained under pressure as political rhetoric out of Italy with respect to the recent budget pointed to the prospect of a showdown with the EU, as well as concerns about possible downgrades in the coming weeks," said CMC Markets chief market analyst Michael Hewson.He added: "This uncertainty along with weakness in Asia looks set to weigh on European markets this morning with a lower open expected."Attention in the UK will lie on the construction Purchasing Managers' Index reading for September, seen slipping to 52.5 from 52.9 last month. The construction data comes following Monday's manufacturing beat, which showed the sector's pace of expansion unexpectedly accelerated in September.However, Societe Generale sees the index falling further than this."We see downward pressures on all three components of the construction PMI; housing, commercial and civil engineering. We expect the overall construction PMI to fall from 52.9 to 52.1," said analysts at Societe Generale.Sterling was quoted at USD1.3007 early Tuesday ahead of the construction PMI, lower compared to USD1.3040 at the London equities close on Monday.In company news, plumbing and heating products supplier Ferguson said revenue rose in its recently-ended financial year, though profit dipped, with its order book indicating growth in the coming months.Revenue for the year to July 31 rose 7.6% to USD20.75 billion, though pretax profit fell to USD1.19 billion from USD1.42 billion. Before exceptional items, pretax profit grew to USD1.27 billion from USD1.21 billion. Ongoing trading profit rose 15% to USD1.51 billion.The US business saw ongoing revenue increase of 9.9% on an organic basis, with acquisitions contributing a further 1.4%. In the UK, like-for-like revenue was up 0.7% though organic revenue was 5.3% lower due to the closure of branches and the exit of low margin wholesale business.The company proposed a final dividend of 131.9 cents, up from 73.33 cents a year ago. This brings the total payout for the year to 189.3 cents, up 21% year-on-year."In the first eight weeks of our new financial year organic revenue growth has been broadly in line with the overall growth rate last year, though growth in September was slightly lower than August. The growth in our order books suggests continued growth in the months ahead," said Chief Executive John Martin. Shell Canada Energy, an affiliate of Royal Dutch Shell, on Tuesday said it has taken a final investment decision on LNG Canada.LNG Canada is a major liquified natural gas project in Kitimat, in which Shell has a 40% working interest. With LNG Canada's joint venture participants also having taken a final investment decision, construction is to start immediately, with first liquified natural gas expected "before the middle of the next decade".Shell said its 40% share of the project's capital cost is within its capital investment guidance of USD25 billion to USD30 billion per year."LNG Canada is well positioned to help Shell meet the growing needs of customers at a time when we see an LNG supply shortage in our outlook. With significant integration advantages from the upstream through to trading, LNG Canada is expected to deliver Shell an integrated internal rate of return of some 13%, while the cash flow it generates is expected to be significant, long life and resilient," said Shell Chief Executive Ben van Beurden.In other oil news on Tuesday, Brent oil hit its best level since late 2014 overnight of USD85.42 a barrel.Jasper Lawler, head of research at London Capital Group, said a move in oil to USD100 per barrel could be on the cards."Concerns over tighter supply ahead of the Iran embargo are keeping the bulls firmly in control. Iran supplies almost 3% of the world's daily oil consumption, so any sanctions on Iran will hit the supply side of the equation, and hard. Supply is looking fragile and when you then throw in Venezuela's declining output, the price looks well supported," said Lawler.Back in company news, Ryanair and Wizz Air both reported a growth in passenger numbers for September.Ryanair said total customers grew 11% in the month to 13.1 million, with load factor flat at 97%. This includes Lauda, which recorded 500,000 passengers in September. The month included two days of "unnecessary" strikes which resulted in over 400 flight cancellations, the budget airline highlighted.Wizz Air meanwhile saw passengers grow 18% in September to 3.2 million, as load factor improved to 94.1% from 92.9%.Defence firm Meggitt said it has been awarded a five-year contract worth USD323 million with the US Defense Logistics Agency to supply wheels, brakes and related spare parts. The contract includes a further five-year option period and replaces a prior five year Indefinite Demand/Indefinite Quantity agreement, which expired on Sunday.In the US on Monday, Wall Street ended mostly in the green, with the Dow Jones Industrial Average ending up 0.7%, the S&P 500 rising 0.4% but Nasdaq Composite closing 0.1% lower.In Asia on Tuesday, the Japanese Nikkei 225 index closed up 0.1%. Markets in China are closed this week for the National Day Golden Week holiday, though the Hang Seng index in Hong Kong opened from Monday's holiday to trade 2.40% lower on Tuesday.The economic events calendar on Tuesday has eurozone producer prices at 1000 BST.