London pre-open: Stocks to edge lower amid growing Sino-US tensions

London stocks were set to edge lower at the open on Tuesday amid growing tensions between the US and China.

The FTSE 100 was called to open 13 points lower at 6,114 after the US tightened its restrictions on technology company Huawei.

CMC Markets analyst Michael Hewson said: "Equity markets in Asia are mixed as US-China tensions ticked up again. The US government will impose further restrictions on the Chinese telecommunications group Huawei - its access to commercially available chips will be reduced again.

"The Trump administration fear Huawei is essentially an arm of China’s ruling communist party. European indices are expected to have a quiet start."

In corporate news, BHP Group said it would widen plans to exit coal operations and review opportunities to offload older oil and gas assets as it reported a drop in full year profits.

The mining giant said it planned to sell, or spinoff, its 80% share in the BHP Mitsui Coal joint venture, which owns two coking coal operations in Australia, along with exiting thermal coal mines and some oil and gas operations.

Full year profits fell 4% to $9.1bn, as higher iron ore prices offset the impact of the coronavirus impact, but below analysts’ expectations.

The company also warned that it expected most major world economies except China to feel the brunt of downturn this year in the face of potential further outbreaks.

Elsewhere, Persimmon said the onset of the Covid-19 pandemic hammered its top and bottom lines during the first half of 2020.

Net revenues dropped from £1.75bn one year ago to £1.19bn and profits before tax were reduced from £509.3m to £292.4m. Nonetheless, according to the homebuilder's chief executive, Dave Jenkinson, by period end, build rates had returned to their pre-Covid 19 levels.

He also sounded a positive note on the outlook and told shareholders had begun the second half in "excellent" fashion.