London pre-open: Stocks seen weaker on North Korea woes, ahead of May speech

London stocks were set for a weaker open on Friday, taking their cue from downbeat sessions in the US and Asia after North Korea reportedly threatened to test a hydrogen bomb over the Pacific Ocean.

Speaking at a United Nations meeting in New York late on Thursday, North Korea's foreign minister Ri Yong Ho reportedly said the country could consider a nuclear test of "unprecedented scale".

The FTSE 100 was expected to open 22 points lower at 7,242.

Investors were also looking ahead to a speech by UK Prime Minister Theresa May in Florence later in the day, during which she is expected to outline her plans for Brexit.

CMC Markets analyst Michael Hewson said: "She is expected to make proposals on the rights of EU citizens, as well as making a budget proposal that will ensure that there is no budget shortfall for the remainder of the current EU budget period, which goes up to 2020. The offer is likely to be conditional on continued transitional access to the single market and customs union over the same period, while there could be a request to open talks on trade, something that in the case of the Irish border is interlinked. A transition arrangement would also help in buying more time to come to a more comprehensive deal.

"If the markets like what they hear and there isn’t a negative response from the EU then the recent rally in the pound could extend further."

On the data front, the CBI industrial trends survey is at 1100 BST.

In corporate news, Smiths Group reported a small decline in full year underlying revenue but 11% growth on a reported basis thanks to the weak pound and said its strategic progress set it up to return to growth next year.

Underlying headline operating profit increased 3% or by 16% on a reported basis as margin expansion in all divisions was limited by increased investment.

Specialist provider of products and services for those over 50, Saga, reported “consistent growth” of 5.5% in its underlying profit before tax for the first half, to £110.2m.

The FTSE 250 company said that growth was underpinned by a 10.4% improvement in its retail broking and travel businesses.

Its profit before tax for the six month period, to 31 July, was £103m, which Saga’s board said reflected costs associated with its successful refinancing and net fair value losses on derivatives.

Tanzanian gold miner Acacia Mining has yielded positive results from a trial to increase the proportion of sellable gold produced by its smallest mine in the country.

Having previously intended to end gold/copper concentrate production in the second quarter of 2018 due to the export ban on this material by the Tanzanian government imposed in March, the positive results of the trial the mine has led the FTSE 250 company to decide to solely produce gold doré bars from now until the end of its life in 2020.