London pre-open: Futures pointing lower on mixed China PMIs

Stock futures are pointing lower at the end of the month with investors taking their cue from mixed readings overnight out of China on the country's manufacturing sector.

A slew of reports on gross domestic product in various euro area countries meanwhile is expected to show that the bloc's economy shrank again in the first quarter.

As of 0720 BST, futures tracking the FTSE 100 were slipping by 16.5 points to 6,915.0.

In parallel, those for the S&P 500 were off by 12.5 points at 4,191.0.

On the economic front, the 'official' Chinese factory Purchasing Managers Index fell from 51.9 from March to 51.1 in April (consensus: 51.8), indicating a sharper than expected slowdown.

Senior China economist at Capital Economics, Julian Evans-Pritchard, said supply-side disruptions appeared to be mostly at fault, although there were also indications of softer demand in construction and services.

"Activity is still robust and is likely to remain so in the near-term, but sequential growth will probably continue to cool," they said.

Nevertheless, the private sector-compiled Caixin Manufacturing PMI had printed above expectations at 51.9 for April, versus an 11-month low of 50.6 in March.

On home shores, Nationwide reported that UK house prices jumped at a month-on-month pace of 2.1% in April to reach £238,831, pushing the year-on-year rate of increase from 5.7% to 7.1% (consensus: 5.1%).

Still ahead on Friday, preliminary readings on first quarter GDP were due out in Austria (0800 BST), Spain (0800 BST) and Germany (0900 BST), together with a separate report for euro area level GDP at 1000 BST.

On a hopeful note however, data published earlier by INSEE showed French GDP rising by an unexpected 0.4% quarter-on-quarter during the first three months of 2021 (consensus: 0.0%).

In the US, investors were waiting on data releases including a reading on personal incomes and spending for March at 1330 BST.

It will be followed by reports on factory activity in the Chicago area (1445 BST) and consumer confidence (1600 BST), with both reports referencing the months of April.

Barclays reports profits more than doubled

UK bank Barclays on Friday said first quarter profits had more than doubled, but cautioned that its outlook remained uncertain due to the Coviud-19 pandemic. The company posted a better-than-expected pre-tax profit before tax for the three months to March 31 of ended March 31 of £2.4bn, up from £923m pounds a year ago and compared with forecasts of £1.76bn. Impairment charges came in at £55m, driven by reduced unsecured lending balances, “no material single name wholesale loan charges and limited portfolio deterioration”. Unlike sector peers Lloyds and NatWest, Barclays did not release any cash set aside to cover potential bad loans from the pandemic.

AstraZeneca said it expected performance to improve as the drugs company reported "robust" revenue growth for the first quarter. Revenue increased 15% to $7.3bn in the three months to the end of March, or by 11% excluding currency movements. At constant currency and excluding the Covid-19 vaccine revenue rose 7% to $7.05bn. The company reiterated its full-year guidance and predicted a "performance acceleration" in the second half.

Smurfit Kappa said corrugated volumes grew around 7% in its first quarter on Friday, in both Europe and the Americas. The FTSE 100 packaging giant said containerboard prices had increased in the first quarter and again at the start of the second quarter, as a result of strong demand and higher recovered fibre and other costs, with the company saying its was “progressively recovering” those costs through its corrugated box system. In addition to cost pressures, Smurfit said the industry was also experiencing supply disruptions and shortages of packaging papers globally.