London pre-open: Stocks seen lower as Huawei CFO arrest prompts trade war fears

London stocks were set for a downbeat open on Thursday, taking their cue from heavy losses in Asia amid renewed concerns about trade relations between the US and China.

The FTSE 100 was called to open 57 points lower at 6,865.

Investors were likely to be jittery as it emerged that the chief financial officer of Chinese telecoms company Huawei, Meng Wanzhou, was arrested in Canada over the weekend and faces extradition to the US over possible violations of sanctions against Iran.

CMC Markets analyst Michael Hewson said: "The arrest comes against a backdrop of concerns about trade and technology as well as cyber security when using Chinese hardware for IT systems. ZTE another Chinese firm has already been sanctioned by US authorities so for Huawei to be dragged in as well comes at a bad time when tensions between China and the US over trade at such a delicate stage, and could derail whatever was agreed at the weekend between President’s XI and Trump.

"Asia markets haven’t reacted well selling off sharply and this is expected to hand over to European markets this morning with more heavy falls and wrestles the attention back from the shift in focus towards the slide in bond yields, which seemed to be a little overdone when considering how little has changed from a week ago."

In UK corporate news, specialist insurer Beazley said its early estimate of the cost of claims from the recent California wildfires is $40m (£31m), net of reinsurance.

The company said investment markets continue to be volatile and its year to date investment return to 30 November 2018 was 0.5% ($27m).

Packaging company DS Smith grew profits 28% in the first half of the year as acquisitions and solid organic growth combined with an increased return on sales margin.

The FTSE 100 group also said it was exploring the potential sale of its plastics division.

AstraZeneca has completed an agreement with Covis Pharma to sell its rights to the medicines Alvesco (ciclesonide), used for the treatment of persistent asthma, and Omnaris and Zetonna (ciclesonide), used for the treatment of nasal symptoms associated with rhinitis.

The pharmaceuticals giant said the rights covered markets outside the US, and the US royalties for the medicines. Under the terms of the agreement, AstraZeneca received a payment of $350m from Covis Pharma.