London pre-open: Stocks set for steady start

London stocks were set for a steady open on Monday amid ongoing worries about a second wave of coronavirus infections and its impact on the economy, while trade tensions between the US and China were also expected to weigh on sentiment.

The FTSE 100 was called to open flat at 6,090.

CMC Markets analyst Michael Hewson said: "There appears to be an increasing nervousness, despite the gains of the last 100 days, that for all of the optimism over recent economic re-openings, that economies are reaching the limits of what they can do, without increasing the risk of a surging second wave of cases, as we head towards the autumn months.

"The lacklustre nature of China’s economic rebound, as shown by its retail sales numbers last week isn’t a great leading indicator when it comes to a similar recovery in consumer spending elsewhere. Friday’s US retail sales numbers for July helped to reinforce some of these fears, coming in slightly below expectations, however when revisions were taken into account, they painted a picture which was mixed at best."

He also pointed to growing tensions between the US and China following the postponement of trade talks between the two, and the signing of an executive order by President Trump forcing China’s ByteDance to sell off its US operation within 90 days.

UK corporate news was scarce, but food producer Cranswick said it expected full-year results to be ahead of expectations after first quarter revenues rose by almost a quarter as more Britons ate at home during the coronavirus lockdown.

The company said revenue in the 13 weeks to June 27 was up year on year. Excluding the contribution from acquisitions made in the prior year, revenue on a like-for-like basis was 19.2% higher. The trend had continued into the second three months of the fiscal year, it added.

"Whilst the board remains cautious about the longer-term economic impact of Covid-19, the uncertainty surrounding the ongoing Brexit negotiations and the conclusion of trade deals with other countries, the outlook for the current financial year ending 27 March 2021 is now expected to be ahead of its previous expectations," it said.