London pre-open: Stocks seen lower after recent gains
London stocks were set to edge down at the open on Thursday following recent gains, but the mood was likely to remain upbeat amid rising optimism about an extension to the Sino-US trade truce and following solid Chinese trade data.
The FTSE 100 was called to open 11 points lower at 7,179.
London capital Group analyst Jasper Lawler said: "Asian markets continued to edge cautiously higher overnight. Trump reportedly considering extending the trade truce deadline by 60 days will help the mood in talks involving Treasury Secretary Steve Mnuchin and Trade Representative Robert Lighthizer in Beijing today.
"Slow but seemingly steady progress is being made on trade issues and that has been enough to stabilise investor sentiment. Data out of China was also helping the mood. Data showing that Chinese exports unexpectedly rebounded at the beginning of the year helped soothe nerves over slowing growth in the world’s second largest economy. European and US futures are taking the lead from Asia, pointing to a broadly positive start."
On home shores, MPs were set to debate and take a vote on the next steps in the Brexit process later in the day, with a series of amendments due to be considered.
CMC Markets analyst Michael Hewson said: "Prime Minister Theresa May will be putting forward a new parliamentary motion today that allows her to continue to negotiate with the EU to seek changes to the Irish backstop, as per the previous vote on the 29th January.
"MPs might seek to create mischief by attempting to amend the motion with an attempt to force another meaningful vote on the deal, try and force a vote on a second referendum, or to revoke article 50."
On the data front, investors will be digesting the latest survey from the Royal Institution of Chartered Surveyors, which showed the UK housing market got off to a weak start in 2019, with enquiries, sales and new instructions all down, as Brexit uncertainty continued to take its toll.
The RICS UK Residential Market Survey found that the number of new properties being listed in January had deteriorated to a net balance of -25%, the lowest since July 2016.
New buyer enquiries had also fallen on a seasonally-adjusted basis, the sixth successive monthly decline. Agreed sales declined as well.
The average time taken to sell a property continued to lengthen, meanwhile, reaching 19.4 weeks – the longest since 2017 when RICS started measuring the data point.
Contributors to the survey blamed Brexit for the weaker market conditions: "In the near term, contributors sense little prospect of a turnaround, as concerns over the potential impact of Brexit continue to cause hesitancy, alongside affordability constraints in parts of the country."
In corporate news, AstraZeneca reported a strong fourth quarter, beating analyst expectations for revenues and earnings, with the drugs colossus guiding to another strong year ahead.
Revenue came in at $6.4bn in the fourth quarter, up 11%, with core operating profit jumping 23% to $2.2bn and core earnings per share rising 22% to $1.58.
Industrial software group Aveva said trends seen in the first half continued into the third quarter as it delivered low double-digit revenue growth in the first nine months of the financial year.
Growth included the impact of strong sales execution, with some benefit of upfront revenue recognition on multiyear rental contracts, Aveva said.
Rolls-Royce has secured an order for Trent 7000 engines to power 40 Airbus A330neo aircraft from Emirates.
The company said the order included its flagship ‘TotalCare’ long term service support. Emirates had also ordered 30 Airbus A350 aircraft, powered by the Trent XWB, also to be covered by TotalCare, with both engine types the sole power plant for their respective aircraft.