London pre-open: Stocks seen muted after China trade data

London stocks were set for a muted open on Monday after the release of disappointing Chinese trade data.

The FTSE 100 was called to open just three points higher at 7,072.

CMC Markets analyst Michael Hewson said: "Despite Friday’s strong finish in the US, European markets look set to open the week slightly on the back foot after the latest China trade data for May showed that exports slowed more than expected, rising 27.9%, although imports rose from 43.1% to 51.1%."

Hewson also pointed to comments made by US Treasury Secretary Janet Yellen, who said at the weekend that higher interest rates might not be such a bad thing. This helped to push US bond yields higher and take some of the steam out of last week’s end-of-week rebound in stock markets, he said.

In corporate news, UK consumer goods group Reckitt Benckiser said it has agreed to sell its baby formula business in China to the private equity firm Primavera for $2.2bn.

Reckitt said it expected to receive about $1.3bn in cash from the deal which it will use to pay down debts, and will keep an 8% stake in the unit, it said in a statement.

Elsewhere, workspace provider IWG warned that underlying earnings for 2021 are set to be "well below" the previous year’s level due to Covid-related restrictions.

"Whilst we have continued to see strong recovery in some of our markets since our first quarter trading update, including positive occupancy momentum in the US, the overall improvement in occupancy across the whole group has been lower than previously anticipated as a result of the prolonged impact of Covid-19, including continuing lockdown restrictions and the emergence of new variants of the virus in some markets," it said.