(Alliance News) - Stocks in London are set to open higher on Wednesday, as investors look to the latest PMI readings.

IG says futures indicate the FTSE 100 to open up 12.8 points, 0.2%, at 7,283.56 on Wednesday. The index of London large-caps closed up 12.94 points, or 0.2% at 7,270.76 on Tuesday, ending its seven day losing streak.

In the US on Tuesday, Wall Street ended mostly lower, with the Dow Jones Industrial Average down 0.5%, the S&P 500 down 0.3% and the Nasdaq Composite up 0.1%.

Recent optimism was challenged, as S&P Global downgraded the credit ratings of several US banks.

The news put the wider US banking sector under selling pressure, as Citigroup shed 2.5%, JPMorgan fell 2.1% and Wells Fargo fell 2.3%.

"S&P's bank rating downgrades – which came a few days after Moody's downgraded some US small and mid-sized banks and Fitch downgraded the US' rating, came as a reminder that the rising rates won't be benign for banks as depositors move their funds into higher interest-bearing accounts, increasing banks' funding costs," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

The pound and the euro advanced against the dollar in early exchanges in Europe.

Sterling was quoted at USD1.2753 early Wednesday, higher than USD1.2734 at the London equities close on Tuesday. The euro traded at USD1.0861, up from USD1.0851. Against the yen, the dollar was quoted at JPY145.66, down versus JPY145.79.

In Asia on Wednesday, the Nikkei 225 index in Tokyo was up 0.5%.

Japan's private sector expanded at a slightly faster pace in August, according to preliminary survey data.

The au Jibun Bank flash composite purchasing managers' index rose to 52.6 points this month, from the final reading of 52.2 in July.

The expansion was led by services, with the sector's flash PMI rising to 54.3 from 53.8, as new orders continued to improve.

However, manufacturing remained in contraction with a reading of 49.7, edging up from 49.6. Rates of reduction in output and new orders were less marked than the prior month, however.

Meanwhile, in China, the Shanghai Composite was down 0.6%, while the Hang Seng index in Hong Kong was up 0.8%. The S&P/ASX 200 in Sydney was up 0.6%.

Gold was quoted at USD1,902.63 an ounce early Wednesday, higher than USD1,897.80 on Tuesday. Brent oil was trading at USD84.08 a barrel, down from USD84.25.

In Wednesday's UK corporate calendar, there are half-year results from construction and engineering firm Costain.

The economic calendar has a slew of PMI prints, with the EU, UK and the US all reporting flash figures from 0900 BST.

By Elizabeth Winter, Alliance News senior markets reporter

Comments and questions to newsroom@alliancenews.com

Copyright 2023 Alliance News Ltd. All Rights Reserved.