(Alliance News) - Stocks in London are set to open lower on Wednesday, as investors fail to muster much risk appetite ahead of key US inflation data.

IG says futures indicate the FTSE 100 to open down 22.9 points, 0.3%, at 7,661.06 on Wednesday. The index of London large-caps closed down 10.23 points, 0.1%, at 7,683.96 on Tuesday.

"Since the end of last year and the strong gains leading up to the end of last month markets have exhibited none of the same enthusiasm to carry the momentum higher, with trading activity subdued and a relatively negative bias so far year to date," said CMC Markets' UK chief market analyst Michael Hewson.

"It's hard to assign a singular reason for the lack of enthusiasm so far month to date apart from a great deal of uncertainty around the prospects for the global economy and the timeline for central bank rate cuts."

On Thursday, US inflation figures will be released which will give weight to the debate over the pace of interest rate cuts this year.

According to FXStreet, market consensus forecasts expect the headline consumer price index to edge up to 3.2% annually in December, from 3.1% in November. However, core inflation - which excludes food and energy - is expected to cool to 3.8% from 4.0%.

The dollar was mixed against major currencies in early exchanges in Europe.

Sterling was quoted at USD1.2697 early Wednesday, edging down from USD1.2703 at the London equities close on Tuesday. The euro traded at USD1.0932, higher than USD1.0923. Against the yen, the dollar was quoted at JPY144.84, up versus JPY144.35.

Investors are also anticipating the latest earnings from US banks, with earnings from Bank of America, Wells Fargo, Citigroup and JPMorgan due on Friday.

In the US on Tuesday, Wall Street ended mostly lower, with the Dow Jones Industrial Average down 0.4%, the S&P 500 down 0.2%, though the Nasdaq Composite edged up 0.1%.

Hewlett Packard Enterprise fell 8.5% after Reuters reported it was in talks to buy Juniper Networks in a deal valuing the network gear maker at about USD13 billion, citing a person familiar with the matter.

After the market close, HPE confirmed a USD14 billion deal for Juniper, which HPE said will help to accelerate its adoption of artificial intelligence technology.

In Asia on Wednesday, the Nikkei 225 index in Tokyo closed up 2.0%, continuing to add to 33-year highs. In China, the Shanghai Composite was down 0.4%, while the Hang Seng index in Hong Kong was down 0.8%. The S&P/ASX 200 in Sydney closed down 0.7%.

Gold was quoted at USD2,025.44 an ounce early Wednesday, lower than USD2,029.09 on Tuesday.

Brent oil was trading at USD77.90 a barrel, edging higher than USD77.81.

In Wednesday's UK corporate calendar, there are trading statements from grocer Sainsbury's, housebuilder Persimmon and bakery chain Greggs.

By Elizabeth Winter, Alliance News deputy news editor

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