(Alliance News) - The FTSE 100 was set to open in the green on Wednesday, despite further bad news out of the world's second-largest economy and ahead of a flash inflation reading from the EU.

IG says futures indicate the FTSE 100 index of large-caps to open 28.30 points, or 0.4%, higher at 7,540.30 on Wednesday. The FTSE 100 index closed up 37.98 points, 0.5%, at 7,512.00 on Tuesday.

China's factory activity shrank for a second straight month in November, official data showed, as large swathes of the country were hit by Covid-19 lockdowns and transport disruptions.

The purchasing managers' index came in at 48.0 points, down from October's 49.2 and well below the 50-point mark separating growth from contraction, according to data from the National Bureau of Statistics.

China has insisted on its zero-Covid policy of stamping out outbreaks with strict quarantines and mass testing even as infections reached record highs this month, dragging down demand and business confidence.

"In November, impacted by multiple factors including the wide and frequent spread of domestic outbreaks, and the international environment becoming more complex and severe, China's purchasing managers' index fell," NBS Senior Statistician Zhao Qinghe said in a statement.

The manufacturing PMI has been in contraction territory for all but four months of the year so far.

In Asia on Wednesday, stocks were mixed. Tokyo's Nikkei 225 index was down 0.2%. In China, the Shanghai Composite was down 0.4%, while the Hang Seng index in Hong Kong was up 0.3%. The S&P/ASX 200 in Sydney was up 0.4%. 

In the US on Tuesday, Wall Street ended mostly lower, with the Dow Jones Industrial Average ending up just 3.07 points, the S&P 500 down 0.2%, and the Nasdaq Composite down 0.6%.

US retailers cheered a buoyant start to the holiday shopping season Tuesday, but warned that a potential freight rail strike could still cripple the critically busy period.

In spite of grinding inflation, customer counts on 'Black Friday' and throughout the Thanksgiving holiday shopping weekend jumped from last year, exceeding expectations, according to data from the National Retail Federation.

Surveys had suggested shopper reticence, but "there's a difference between attitude and action," said NRF President Matthew Shay.

The NRF's survey estimated that 196.7 million Americans shopped in stores in the five-day stretch between last Thursday's Thanksgiving and "Cyber Monday," spending an average of USD325.44 on holiday-related purchases.

The euro traded at USD1.0341 early Wednesday, flat against USD1.0340 late Tuesday. Against the yen, the dollar was quoted at JPY138.51, higher versus JPY138.38.

Sterling was quoted at USD1.1955 early Wednesday, lower than USD1.1982 at the London equities close on Tuesday.

The governor of the Bank of England has said that the lack of communication from the Treasury ahead of September's mini budget made it an "extraordinary" and "abnormal" process.

Andrew Bailey also told the House of Lords Economic Affairs Committee that the Bank of England "did not bring the government down" after criticism from economists.

The central bank chief told the Lords that neither he, nor the bank, knew what was going to be in the controversial fiscal statement.

In particular, the absence of the usual economic forecast from the Office for Budget Responsibility made it difficult for the central bank to prepare accordingly, he stressed.

Gold was quoted at USD1,753.86 an ounce early Wednesday, slightly higher than USD1,753.25 on Tuesday.

Brent oil was trading at USD84.85 a barrel early Wednesday, down a touch from USD85.06 late Tuesday.

In Wednesday's corporate calendar, there are half-year results from water utility Pennon, luxury fashion company Mulberry and consumer gift packaging and stationery firm IG Design Group.

In the economic calendar, there's a flash CPI reading from the EU at 1000 GMT.

Michael Hewson at CMC Markets said the print should "set the scene as to whether we get 50 [basis points] or 75bps when the [European Central Bank] meets in just over two weeks' time."

By Heather Rydings; heatherrydings@alliancenews.com

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