London pre-open: Stocks seen lower amid ongoing trade woes
London stocks were set to fall at the open on Thursday amid ongoing worries about trade, with the first vote in the Tory leadership contest due.
The FTSE 100 was called to open 19 points lower at 7,348.
Sino-US trade relations were in focus again as US President Trump reiterated after the European market close on Wednesday that he will impose tariffs on $325bn of Chinese imports if a deal isn’t reached.
CMC Markets analyst David Madden said: "Mr Trump has made it clear that the trade war will ratchet up if Xi Jinping doesn’t show up at the G20 meeting later this month. Trade concerns are likely to persist in the near term, but we might not see major moves in global stock markets until the G20 summit, when the two leaders are expected to meet."
Meanwhile, on home shores, Tory leadership rivals were facing their first party vote.
On the data front, the latest survey from the Royal Institution of Chartered Surveyors showed that delaying the UK’s planned departure from the European Union has helped steady the country's housing market.
The RICS UK residential market survey for May found that outright declines in new buyer interest showed signs of stabilising in May "in the wake of the decision to extend the deadline for withdrawal from the EU till the end of October".
On a national level, new buyer enquiries were largely unchanged compared to April, the first time since July 2018 respondents did not report a decline.
The monthly survey also found that the negative trend in agreed sales, new instructions and prices had “diminished to a certain degree”.
However, agreed sales continued to slide in May, falling for the tenth successive month with a net balance of -13% contributors reporting a decline, although that was the least negative reading for the sales indicator since December.
Looking ahead, survey respondents said they did not expect the market to improve in the short term, with a net balance of -14% reporting sales expectations for the next three months consistent with a further decline in activity. That outlook improved over the longer-term, however, with respondents seeing a “modest improvement” in sales over a 12-month period.
Regarding house prices, 10% more respondents saw them fall rather than rise in May, an improvement of April’s net balance figure of -22 helped in part by London stabilising. House prices have fallen heavily in the capital over the last couple of years, but RICS noted that London appeared “to bounce back a little” in May.
In corporate news, Tesco said first quarter like-for-like sales rose 0.2% to £13.9bn, with UK sales up 0.4% to £9bn and growth at the newly acquired Booker over the period.
Elsewhere, PZ Cussons said its annual profit before tax will come in at close to £70m, roughly £10m lower than the year before on the back of a "disappointing" performance in Africa as the consumer backdrop continues to weaken in Nigeria.