London pre-open: Stocks to fall amid conflicting China-US trade reports

London stocks were set to fall at the open on Thursday, tracking losses in Asia amid conflicting reports about the progress being made in China-US trade talks.

The FTSE 100 was called to open 27 points lower at 7,235.

Late on Wednesday, Reuters reported that a phase one trade deal between the US and China might not be agreed this year. However, there were also reports overnight that China’s top negotiator, Liu He, is "cautiously optimistic" about signing phase one deal.

In addition, both chambers of US Congress have passed a bill in support of pro-democracy protesters in Hong Kong, adding to concerns about tensions between the US and China.

CMC Markets analyst David Madden said: “The Hong Kong angle has added weight to the argument that the US and China might not sign phase one of the trade agreement by the end of 2019.

“Significant progress has been made in recent weeks, but it is worth remembering the discussions were ‘about 90%’ complete in May, according to Steve Mnuchin.”

On the UK data front, public sector net borrowing figures for October are due at 0930 GMT.

In corporate news, Centrica maintained full year guidance as it added 136,000 total accounts and lost 107,000 energy customers in the four months to October.

In a trading update, the company reported higher margins and returns in business energy supply in North America and strong trading and optimisation performance in Europe, offsetting the impact of further extensions to outages at the non-operated Dungeness B and Hunterston B nuclear power stations.

It also experienced lower near-term European wholesale gas prices, although 2019 exploration and production earnings were largely protected by forward hedging.

Severn Trent booked an interim profit before tax of £180.7m, down 11% on the same period last year as the FTSE 100 company was hit by infrastructure costs and lower earnings from property sales.

Even so, the utility company hiked its half year dividend by 7% to 40.03p per share after revenue edged 3% higher to £910.0m following tariff increases in the regulated water and waste water segments.

Speciality chemicals firm Johnson Matthey reported a 3% improvement in sales to £2.12bn in its first half, which it said was driven by “good growth” in its clean air and efficient natural resources operations.

The company said its underlying operating profit declined 5% to £265m, as it was impacted by around £15m of one-off costs in clean air, including additional freight costs and inefficiencies within its manufacturing footprint, driven by the phasing of completion of the company’s new plant in Poland.

Underlying earnings per share were 12% lower at 95.8p, reflecting lower underlying operating profit, higher net interest expense and a one-off tax provision.