London pre-open: Stocks seen lower on weak China data

London stocks were set for a negative open on Thursday, taking their cue from losses in Asia following the release of weak Chinese factory orders data and as the Trump-Kim denuclearisation summit yielded no progress.

The FTSE 100 was called to open 22 points lower at 7,085.

Sentiment was likely to take a hit after the summit between US President Trump and North Korean leader Kim Jong-un ended with no agreement. White House press secretary Sarah Sanders said earlier: "No agreement was reached at this time, but their respective teams look forward to meeting in the future."

Meanwhile, data showing that Chinese factory activity contracted to a three-year low in February was also set to dent the mood. The official purchasing managers’ index released by the National Bureau of Statistics fell to 49.2 in February from 49.5 the month before, missing expectations for it to remain unchanged.

London Capital Group analyst Jasper Lawler said: "Factory activity in China contracted for a third straight month in February as export orders fell to the lowest level since the global crisis. Further evidence of a slowdown in China hit risk sentiment. The realisation that there is still considerable work to be done for the US and China to reach a trade agreement, plus further evidence of economic activity in China slowing is leaving little for traders to cheer on Thursday. European bourses look set to follow Asia lower and US futures are also pointing to a softer start."

On home shore, the latest survey from GfK showed consumer confidence was holding firm despite Brexit uncertainty. GfK’s long-running consumer confidence index increased by one point in February to -13, beating expectations for a reading of -15.

Joe Staton, client strategy director at GfK, said: "Despite a slowdown in overall growth and concerns about the impact of Brexit uncertainty on the UK economy, topline consumer confidence is stable again this month. Although bumping along in negative territory, the overall index score is not showing any sign of making the dramatic drop seen after the June 2016 Brexit referendum or in the early days of the last financial downturn.

"While the view on personal finances looking at the year to come is still marginally positive, the continuing depressed sentiment towards the general economic situation might point towards the calm before the storm of post-Brexit headwinds and potential negative economic outcomes."

Elsewhere, the latest data from Nationwide showed that house prices remained subdued in February. Nationwide’s seasonally-adjusted measure of house prices fell by 0.1% month-to-month in February.

However, the year-over-year growth rate increased to 0.4% from 0.1% in January, coming in slightly above consensus expectations of 0.3% growth.

In corporate news, British American Tobacco grew underlying earnings above its target range last year despite cigarette volumes declining 3.5% as predicted. BAT finance director Ben Stevens also announced his retirement after 30 years with the company.

Rolls-Royce reported free cash flow more than doubled to £641m last year and it is aiming to generate at least £1bn by 2020. The engine maker said it has decided to withdraw from the current competition to power Boeing's proposed new midsize aeroplane.

Mondi reported a "strong" financial performance in its final results, with revenue rising 5% year-on-year to €7.481bn.

The paper and packaging group said underlying EBITDA for the year ended 31 December was €1.764bn, up 19%, while basic underlying earnings per share were ahead 27% at 189.1 euro cents. Its board recommended a full year ordinary dividend of 76.0 euro cents per share - a 23% increase over last year’s distribution.