London pre-open: Stocks seen lower as Trump speech disappoints
London stocks were set to fall at the open on Wednesday amid escalating tensions in Hong Kong and after US President Trump threatened China with more tariffs if it does not sign a trade deal.
The FTSE 100 was called to open 28 points lower at 7,337.
CMC Markets analyst Michael Hewson said investors had been hoping that in his speech to the economic club of New York on Tuesday, Trump would withdraw his threat to levy tariffs on the European auto sector and clarify last week's comments from the Chinese Ministry of Commerce that both sides had agreed to roll back existing tariffs on each other’s goods in a phased implementation of any agreement.
"As it happened the President did nothing of the sort, if anything he appeared to fire the starting gun on his 2020 re-election campaign, with a rambling love letter to his own administration littered with criticisms of the Federal Reserve, the EU and China, while at the same time telling his audience how great he is, despite the constraints of US monetary policy and the Democrat opposition," said Hewson.
"There was no mention of EU auto tariffs, apart from criticism of EU trade policies, though he does need to make a decision on these tariffs by November 14th.
"He also held open the prospect of a phase one US, China trade deal, but without any further details, apart from threatening an escalation if no deal was forthcoming. "
On the UK data front, the retail price index, consumer price index and producer price index are all due at 0930 GMT.
In corporate news, house builder Taylor Wimpey said it was on track to deliver full year results in line with expectations, albeit with slightly higher volumes and slightly lower operating margins than guided at the half year.
Sales rates for the year to date remained strong at 0.96 sales per outlet per week compared with 0.81 a year earlier, “driven by our high-quality sites and improvements in both product availability and build capacity that we have made over the last 18 months”, the company said in a trading statement on Wednesday.
"Forward indicators for sales have remained at healthy levels albeit we have seen some increasing customer caution, particularly in the higher-priced markets of London and the South East, as a result of the ongoing political and economic uncertainty."
Spirax-Sarco Engineering said its full year expectations were unchanged despite a subdued macroeconomic environment and forecasts for a slowdown in industrial production growth rates in both developed and emerging markets.
The pump and steam-management system manufacturer reported that its organic sales growth rate in the four months to October reduced from the 8% achieved in the first half of the year, but insisted that its diversification across market sectors stood the business in good stead.
Coca-Cola HBC reported a third quarter of “solid performance", even after a period of poor weather impacted industry volumes in our geographies.
The bottler of Coca-Cola products said it saw foreign exchange-neutral revenue growth of 3.4%, or 2.3% excluding the impact of the Bambi acquisition. It said volumes increased 1.1% in the quarter, but were down 0.1% excluding Bambi, with transactions growing faster than volume and its brands gaining or maintaining share in the majority of its markets.