London stocks were set to rise at the open on Wednesday after markets in the US closed off lows.
The FTSE 100 was called to open 15 points higher at 7,281.
CMC Markets analyst Michael Hewson said: “European markets underwent a sharp downward lurch yesterday, with the DAX closing lower for the fourth day in succession, as well as hitting a two-week low, although by contrast the FTSE 100 appears to have found a bit of a base, posting a modest gain for the second day this week.
“The price action of the past two days has been particularly fickle, with tech stocks feeling the biggest downdraught as surging US yields, and the prospect of tighter coronavirus restrictions in Europe, weighing on economic activity through December, knocked some of the stuffing out of investor confidence.
“This lack of confidence could also be reflected later this morning in the latest German IFO business climate survey which could see a further softening in November to 96.7, from 97.7 in October, although the survey may well be outdated already given the events of the last few days.
“When the German health minister feels compelled to say in public that by the end of this winter everyone in Germany will either be vaccinated, recovered, or dead, it isn’t generally conducive to a positive business environment, which means the December IFO survey could well see a deterioration even if today’s number is better.
“The weaker tech theme continued in US trading with the Nasdaq sliding back, even as the Dow closed higher, and the S&P 500 finished the day flat. This rally off the lows could well see markets here in Europe open higher later this morning.”
In corporate news, United Utilities reported a 4% increase in first-half profit as water consumption increased along with economic activity. Underlying operating profit rose to £332.8m in the six months to the end of September from £318.5m a year earlier as revenue increased 4% to £932.3m.
The interim dividend rose to 14.50p from 14.41p. The water company said it expected annual revenue to be about 2% higher than the previous year with capital spending between £625m and £675m. Underlying operating and finance costs will increase.
Science and chemicals company Johnson Matthey said it had sold its advanced glass technologies business to Fenzi Holdings for £178m as it reported a half-year loss.
The company, which last week issued a profits warning and said it was exiting its battery business, swung to a pre-tax loss of £9m compared with a profit of £26m a year ago.
