London pre-open: Stocks seen higher after Nasdaq, S&P close at records
London stocks were set for a positive open on Wednesday, underpinned by the fact that the S&P 500 and Nasdaq closed at record levels in the previous session.
The FTSE 100 was expected to open 25 points higher at 7,415.
CMC Markets analyst Michael Hewson said: "In the US it was a tale of two sectors with banks falling back while technology stocks helped propel the Nasdaq to yet another record peak after Netflix reported a 5.2m memberships in Q2, well above the 3m number expected. Facebook also posted a new record high, as investors piled in ahead of next week’s earnings numbers.
"Banking stocks underperformed after Goldman Sachs saw a 40% drop in its investment banking division, following on from a similarly weak performance from JP Morgan in its Friday numbers last week, which in turn pulled down its UK peers Barclays and Royal Bank of Scotland."
There are no major UK data releases due but in the US housing starts and building permits are at 1330 BST.
On the corporate front, Reckitt Benckiser has agreed to sell its food business for $4.2bn (£3.2bn) to Schwartz spices owner McCormick.
In April Reckitt's chief executive Rakesh Kapoor kicked off a “strategic review” of its non-core food business, with analysts expecting a price nearer £2.2bn for a business that contains French's mustard and Frank's Red Hot brands.
On Wednesday morning, with McCormick having confirmed the deal overnight, Kapoor said: "Our French's Food business is a true reflection of RB's strengths - a portfolio of great brands driven through a culture of innovation by passionate people to deliver consistent outperformance."
FTSE 100 water company Severn Trent lifted its guidance for its business services division on Wednesday following the sale of its North American business.
In a trading update for the period from 1 April to 19 July, Severn said it now expects growth in both revenue and profit before interest and tax on a like-for-like basis.
Aviva has agreed to sell Friends Provident International (FPIL) for £340m to RL360, a subsidiary of International Financial Group.
The sale is expected to create a one-off loss on disposal of approximately £130m but as FPIL did not contribute any cash to Aviva in its last financial year the disposal is expected to be positive to Aviva's cash dividend paying capacity.