London pre-open: Stocks seen muted as investors mull earnings data

(Sharecast News) - London stocks were set for a muted open on Tuesday as investors mulled the latest UK earnings data and continued to eye developments in the Middle East. The FTSE 100 was called to open unchanged at 7,630.

CMC Markets analyst Michael Hewson said: "European markets started the week cautiously higher in the absence of an escalation of tensions over the weekend, although you can be sure that investors will be keeping a wary eye on events in the Middle East as Israel weighs its next move.

"US markets followed suit with slightly more enthusiasm and a much stronger session, despite a sharp rise in US 10-year yields, while the US dollar and gold both slipped back.

"This resilience continued this morning as Asia markets also pushed higher while markets here in Europe look set for a flat open as investors gear up for a longer lead up time to a possible Gaza incursion and an extended conflict."

On home shores, data released earlier by the Office for National Statistics showed that average earnings excluding bonuses rose 7.8% in the three months to August versus a year earlier, down from upwardly-revised 7.9% growth the month before. Economists were expecting growth to be unchanged at 7.8%.

Total earnings including bonuses eased to 8.1% growth from 8.5%, versus consensus expectations of 8.3%.

In corporate news, engine maker Rolls-Royce said it plans to cut up to 2,500 jobs worldwide as part of a plan to streamline the organisation.

The company, which currently employs 42,000 worldwide, said the engineering technology & safety segments will come together as a single team across the group, responsible for product safety, engineering standards, process, methods and tools.

"It will also enable engineering talent and technology to be used more effectively across the business," Rolls-Royce said.

Elsewhere, price comparison website Moneysupermarket.com said it saw growth accelerate in the third quarter due to high levels of switching in car and home insurance, offsetting the impact of higher interest rates on loan and funding activities.

The company said that it remains confident of hitting full-year expectations, with the consensus forecast for adjusted EBITDA at £129.5m for 2023 financial year, up from £115.5m in 2022.