London pre-open: Stocks to edge down as trade war jitters persist

London stocks were set to edge lower at the open on Wednesday amid ongoing trade war jitters.

The FTSE 100 was called to open eight points lower at 7,585, while US markets will be closed for the Independence Day holiday.

London Capital Group analyst Jasper Lawler said: "With just two days to go until the US-Sino trade war threats start to take effect, relations between the US and China remain hostile, rattling investors. Further blocks and red tape this time on the likes of Micron Technology and China Mobile, highlighted the likelihood of increased friction between the two nations, as we move towards Friday’s US imposed deadline.

"Tech stocks naturally came under significant selling pressure overnight, pulling the Dow & the S&P away from early energy inspired gains and into negative territory."

On the data front, Markit's services purchasing managers' index for June at 0930 BST is expected to be unchanged from May at 54. Lawler said that with the clock ticking until the Brexit deal October deadline and still a "mind-boggling" amount of uncertainties to resolve, the pound could find any service sector PMI-inspired rally drastically limited by the lack of Brexit progress.

"Alternatively a weaker-than-forecast services PMI print could see the pound plunge sharply lower, with Brexit uncertainty and concerns over the UK economy being too much for the pound to cope with, sending it back towards $1.31."

In corporate news, Sainsbury’s revenue growth slowed in the first quarter as the supermarket chain cut prices to sell more items to customers. Sales, excluding fuel, at stores open a year or more rose 0.2% in the 16 weeks to 30 June compared with 0.9% growth in the preceding quarter. Total grocery sales rose 0.5% compared with 2.1% the previous quarter.

BP has entered into agreements with ConocoPhillips that will significantly increase its holding in the Clair field, a core asset of BP's North Sea business in the UK, while also selling its non-operating interest in the Kuparuk and satellite oilfields in Alaska, it announced on Wednesday.

The oil major said details of the transactions were not being disclosed but, excluding customary adjustments, the transactions together were expected to be cash neutral for BP and ConocoPhillips.

Building products supplier SIG reported a slight improvement in UK sales in the second quarter but a slowing of growth in Europe.

The FTSE 250 group said first-half sales for the group were therefore almost perfectly flat compared to last year.

Compass Group said that Johnny Thomson will step down from his role as finance director and leave the company by the end of December.

A search for his successor will be started immediately.

Chief executive Dominic Blakemore said: "Johnny has played a critical role in Compass' success, both managing regions of our group and as group finance director, and he leaves the business in strong financial health. I wish Johnny well and thank him for his contribution to the business."