London pre-open: Stocks seen up on positive US cues

London stocks were set for a firmer open on Wednesday, taking their cue from a positive session on Wall Street as trade war woes were put to one side.

The FTSE 100 was called to open 12 points higher at 7,730.

CMC Markets analyst David Madden said the positive call came despite the latest Chinese trade balance figures overnight, which revealed a surplus of $28.05bn in July versus consensus of $39.33bn.

"A drop in the trade surplus is hardly a surprise given the trade tensions between China and the US. Imports jumped by 27.3%, and economists were expecting an increase of 16.2%. Exports rose by 12.2%, while traders were expecting an increase of 10%. It is worth noting that exports jumped by 11.2% in June. The disappointing trade figures put China in a difficult position given the standoff with Washington DC in relation to trade," Madden said.

As far as sterling is concerned, Madden noted that it has lost a lot of ground due to the growing fear of a no-deal Brexit.

"The positive bump the pound received on Tuesday morning on the back of the upbeat Halifax UK house price report didn’t last long, and that suggests that confidence in the pound is still weak. We are not expecting any major economic announcements from the UK today, but traders will be paying close attention to the latest political developments regarding Brexit. "

In corporate news, Glencore increased earnings 12% in a half-year where the mining and commodities trading giant was beset by lawsuits and an ongoing investigation by US authorities.

Net income attributable to equity holders from the first six months of the year came out at $2.78bn, up 13% on the same period last year, while adjusted earnings before interest, tax, depreciation and amortisation rose 23% to $8.27bn, which was slightly short of the consensus forecast.

A flurry of betting before the football World Cup in the second quarter increased interim pre-tax profits at Paddy Power Betfair by 4% to £106m as revenue rose 5% to £867m. Underlying profits fell 1% to £217m. The dividend was lifted 3% to 67p a share.

The company added that full year 2018 underlying EBITDA, pre-US sports betting, was now expected to be between £460m - £480m, reflecting recent trading momentum, the introduction of additional taxes in Australia and the inclusion of losses from the FanDuel daily fantasy sports business.

Spirax-Sarco Engineering issued its half-year results for the six months ended 30 June on Wednesday, with revenue growth of 28% t £547.6m, or organic growth of 7%.

The FTSE 250 company said its adjusted operating margin was 23.0%, with net debt standing at £373m, or 1.3x EBITDA. Its interim dividend was raised 14% to 29p.