London pre-open: Stocks seen weaker ahead of Trump-Juncker meeting
London stocks were set for a downbeat open as trade war worries returned ahead of US President Trump's meeting with EU Commission President Jean-Claude Juncker at the White House on Wednesday.
The FTSE 100 was called to open 12 points lower at 7,697.
The meeting between Trump and Juncker comes after the US administration decided to impose tariffs on all imported European cars.
Tweets from Trump ahead of the meeting were doing little to calm nerves. "Tariffs are the greatest!" was one of his gems, while he also tweeted that the US and the EU should drop all tariffs, barriers and subsidies. "That would finally be called Free Market and Fair Trade!" he said.
London Capital Group analyst Jasper Lawler said: "The unnerving headlines centred around trade tensions, which are showing no signs of evaporating anytime soon. In fact, Trump declaring that 'tariffs are the greatest' paints a picture of these levies becoming a permanent fixture to his administration, a point which was backed by a pledge of $12bn in aid for US farmers hit by Chinese retaliatory trade tariffs; showing that Trump has no intention of removing pressure."
"Today the focus will switch to the more worrying scenario of a US – EU trade war, which, under a worst case scenario has the potential to spark a crisis, if not a full blown recession.
"The threat as it stands so far from Trump, is a 20% tariff on all imported European autos. The EU, whilst not wanting to walk into a trade war, does however stand ready to impose tariffs on $300bn of US imports should such a move be required. Juncker is widely expected to try to de-escalate the current tensions between the EU and the US by focusing on areas of common ground. The EU will not want to travel down any line of discussion with Trump which could end in tariffs on its autos."
On the UK data front, BBA mortgage approvals are at 0930 BST while the CBI distributive trades survey is at 1100 BST.
In corporate news, Antofagasta said second quarter copper production rose 6.1% to 163,200 tonnes compared with the previous three months and expected it to increase throughout the year as grades improve.
Production for the half year was down 8.5% to 317,000 tonnes compared with 2017 as the company maintained full year guidance of 705,000 - 40,000 tonnes and net cash cost guidance at $1.35/lb.
ITV unveiled a plan to focus on production and expand direct-to-consumer activities as the broadcaster announced a reduction in first-half earnings caused by the cost of the World Cup.
Adjusted earnings before interest, tax and amortisation for the year to the end of June fell 7% to £375m. Pre-tax profit rose to £265m from £259m.
Vodafone updated the market on its trading for the quarter ended 30 June on Wednesday, reporting a 4.9% reduction in group total revenue to €10.9bn on an IFRS 15 basis, which the board said reflected the adoption of IFRS 15, as well as currency headwinds.
The FTSE 100 telco giant said first quarter organic service revenue grew 1.1% based on IFRS 15, and reiterated its guidance for underlying organic adjusted EBITDA growth of between 1% and 5% for the year.