(Sharecast News) - London stocks were set to edge a touch higher at the open on Wednesday, with ongoing concerns about the coronavirus pandemic capping gains, as investors eyed the latest reading on the UK manufacturing sector.
The FTSE 100 was called to open 11 points higher at 6,180.
CMC Markets analyst Michael Hewson said investors appear to be caught in two minds at the moment, with optimism about a continued improvement in economic data on the one hand being offset by caution on the other over the prospect that any second wave could push out any recovery well into next year.
"The continued rise in US coronavirus cases appears to be being pushed to one side for now, despite dark warnings from Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, that cases could soar to 100,000 a day. This could change if death rates start to follow suit, which in turn could see current sentiment take a turn for the worst.
"This perhaps helps explain why gold prices have continued to edge higher, hitting their highest levels since October 2012, while at the same time stock markets remain fairly well supported, as investors hedge their bets."
On the data front, Markit's manufacturing PMI for June is due at 0930 BST.
In corporate news, supermarket chain Sainsbury's reported an 8.2% rise in first quarter like-for-like sales driven by groceries as Britons stocked up during the coronavirus lockdown.
Online sales doubled during the period as customers shifted to home deliveries, but the company added that it expected a £500m hit to profits from Covid-19 "broadly offset by business rates relief and stronger grocery sales".
Travel food operator SSP Group said it was looking to slash 5,000 jobs in the UK as it dealt with the collapse in air travel due to the Covid-19 pandemic.
The company, which operates outlets at airports and train stations, said it expected only 20% of stores to be open by the autumn.
"At this stage, we have not commenced restructuring of a material scale in any other geographies due to our expectations of a more rapid recovery, the longer durations of furlough support or our contractual lay-off arrangements," SSP said.