London pre-open: Stocks to drop on weak Asian cues; G7 summit eyed
London stocks were set to drop at the open on Friday, taking their cue from weakness in Asia as investors digested the latest data out of China and eyed the G7 summit in Quebec.
The FTSE 100 was called to open 29 points lower at 7,675.
London Capital Group analyst Jasper Lawler said: "Given the quiet economic calendar today, the continuing trade spat between the US its closest allies will attract a good deal of attention as the G7 summit begins. The broader US market posted its first loss in five days as the recent equity rally, and more specifically tech rally, faltered, whilst investors started to show unease over the potential climate at the G7 Summit. Souring investor sentiment resulted in a softer session for Asia and indicates a weaker start for Europe on the open
"There is little doubt that trade will top the agenda at the Friday and Saturday Summit in Canada. Given Trump’s trade levies on US allies and his general unpredictability, uncertainty could continue to form a central pillar to trading as we move through the summit and into the weekend. Trump has already had a twitter spat with France’s President Macron prior to the event, which doesn’t bode well. However, the big question for traders is unlikely to focus on Trump’s actions, but rather the level of hostility and aggression that the other leaders will show?"
Market participants will also be mulling over figures that showed China’s trade surplus for May came in at $24.92bn compared to consensus expectations of $31.9bn, while imports were up 26% versus expectations for a more modest increase of 18.7%. Meanwhile, exports were up 12.6%, also beating forecasts for a 10% rise.
In UK corporate news, BT Group chief executive Gavin Patterson will step down later this year after the telecoms giant's board wielded the axe after pressure from major shareholders.
With the search for a successor already underway, an appointment is expected during the second half of the year.
Lloyds Bank on Friday said it had sold its remaining 3.3% in Standard Life Aberdeen (SLA) for £344m.
The sale comes after Lloyds cancelled its £109bn arrangement with SLA in February. The bank had expressed concerns over competition when SLA merged with Aberdeen Asset Management.
Games Workshop updated the market following the end of its trading year on Friday, reporting that sales and profit growth - discussed in an update on 4 May - had continued to the end of the financial year.
The company said sales growth had been across all sales channels, with the board saying it expected the group's sales for the 53 weeks to 3 June to be approximately £219m, with profit before tax to be no less than £74m.