London pre-open: Stocks set for losses amid China-US trade confusion

London stocks were set to fall at the open on Friday as investors continued to weigh up the potential for a China-US trade deal.

The FTSE 100 was called to open 24 points lower at 7,382.

Sentiment got a boost on Thursday from news that the US and China had agreed to roll back tariffs as part of a 'phase one' trade deal. However, a report earlier on Friday suggested there could be some division among the Trump administration over the move.

In currency markets, sterling was flat against the dollar at 1.2813 after the Bank of England revealed a day earlier that two out of nine policymakers had voted for a 25 basis point interest rate cut.

CMC Markets analyst David Madden said: "The votes caught traders by surprise as it begs the question, if the policymakers would lower rates now, what would the central bank do in the event of a disorderly Brexit."

On the corporate front, Royal Mail said it was seeking an injunction on Friday at the High Court to stop industrial action by the Communication Workers Union (CWU) claiming “irregularities” in the ballot of staff. The company said the “integrity and legal soundness of any electoral process is vital”, especially in relation to potential industrial action around the General Election on December 12.Royal Mail claimed it had evidence that CWU members were asked to intercept and remove their ballot papers from mail coming into their delivery offices, before they were delivered to their homes, contravening company procedures.

"Royal Mail is also making this application because of the damage industrial action would do to the company and its customers in the run-up to Christmas,” it added. The CWU last month voted by 97% in favour of a nationwide strike, saying the company had failed to adhere to a pension deal agreed last year. It rejected an offer of talks without preconditions if the threat of action was removed.

Morgan Advanced Materials said it remained on course to meet full year expectations as operating margins improved and sales for the first nine months of the year edged up by 0.2% compared to the same period in 2018.

The materials supplier added that declines in the industrial and automotive markets were offset by growth in the semiconductor and electronics, healthcare and chemical and petrochemical segments.

Spirent Communications reported continued business growth in its third quarter trading update, with its board saying it remained “confident” that the group would show progress in 2019.

The company’s expectations for the full year were left unchanged. Its board said that, as it entered a “period of upcycles” driven by 5G and the move to higher-speed ethernet testing, it managed to deliver a “solid performance” in the three months ended 30 September, pointing out that in particular, the firm continued to see healthy order intake growth, in line with that seen in the first half.