City sources predict the FTSE 100 will open five points below yesterday's close of 6,826.33, as investors digest an unexpected contraction in Chinese manufacturing ahead of what is predicted to be an improvement in Eurozone PMI data.
The preliminary reading of HSBC manufacturing PMI for January registered a decline for the first time since July, which had a small impact on Asian indices.
Craig Erlam, Market Analyst at Alpari, noted that "the general consensus appears to be that this should be seen as a potential warning of slowing activity this year in the world's second largest economy, rather than confirmation of it".
In the US last night, markets finished mixed after trading within a narrow range for most of the session, with investors digesting a barrage of earnings and showing caution ahead of economic data due out today, including existing home sales and initial jobless claims.
Also on the agenda is the January consumer confidence figure for the Eurozone, which is expected to show a further improvement, this time to -13, although, as Erlam pointed out, "this is still deep in negative territory highlighting just how pessimistic consumers still are".
Speaking of the release of both manufacturing and services PMI data later on this session, Erlam continued: "The numbers coming out of Germany and the Eurozone have been very encouraging over the last six months or so and have been very consistent with people's expectations for the coming year, small amounts of growth in the euro area driven predominantly by accelerating growth in Germany."
However, investors are nervous about France, where the PMI reading has weakened since the third quarter of last year, although today's figures are expected to show a modest improvement.
In company news, speciality bio-pharmaceutical company Shire has announced the retirement of Non-Executive Chairman Matthew Emmens, who joined the company as Chief Executive in 2003 and became Chairman five years later. He will be succeeded by Susan Kilsby, Chairman of Shire's Audit, Compliance & Risk Committee, at the group's annual general meeting on April 29th.
Bourses operator London Stock Exchange said it enjoyed a strong third quarter performance, after solid trading across all businesses, and as it continues to focus on the integration of LCH.Clearnet. Total income for the three months ended December 31st rose 48% to £308.9m and for the nine months year-to-date climbed 38% to £876.0m.
easyJet carried 14.3m passengers in the first quarter, an increase of 4.2% against the previous year. The European airline achieved a 3.4% jump in revenue per seat on a reported basis to £55.71 in the three months ended December 31st, despite strong prior year comparators from post-London Olympics trading and fierce competition.
Publishing and education company Pearson has admitted that its trading and financial performance for 2013 was weaker than expected and said that current trading has been challenging. The Financial Times owner reported that adjusted earnings per share for last year totalled 83p before restructuring charges, in line with previous guidance and the 82.6p recorded in 2012.