London pre-open: Stocks to edge lower after China data, ahead of UK inflation
London stocks were set for a slightly weaker start on Wednesday as investors mulled the release of better-than-expected Chinese growth figured and looked ahead to UK inflation data.
The FTSE 100 was called to open seven points lower at 7,463.
Data released overnight showed that first-quarter Chinese GDP grew at 6.4%, beating estimates of 6.3% and matching the 6.4% seen in the fourth quarter of last year, while the Lunar New Year slowdown in industrial production in February of 5.3% saw a rebound to expansion of 8.5% year-on-year. This was ahead if expectations of 5.9%.
In addition, retail sales for March rose 8.7% %, up from 8.2%.
CMC Markets analyst Michael Hewson said: "While it would be easy to be cynical about these numbers, and I am, there is evidence that March did see a rebound in economic activity even though the trade numbers don’t appear to reflect that.
"Asia markets would appear to reflect some of that scepticism, trading a little mixed this morning, and this look set to translate into a mixed to flat European open."
Market participants will also be digesting Netflix's Q1 numbers, which led the stock lower after the US close as guidance disappointed.
London Capital Group analyst Jasper Lawler said that while Netflix beat expectations on both top and bottom lines, "investors were far from impressed by the EPS Netflix predicts in the second quarter, which at 55c is well below the $1 per share that analysts had pencilled in".
On the UK data front, all eyes will be on the latest inflation figures, with the retail price index, producer price index and consumer price index all due at 0930 BST.
In corporate news, BHP cut iron ore output forecasts, reflecting the impact of tropical cyclone Veronica in Western Australia, which also hit production at sector peer Rio Tinto.
The world's biggest miner cut its forecast to 265m - 270m tonnes, from 273m – 283m tonnes. Iron ore output for the three months to end-March fell 5% to 64m tonnes.
Full-year production costs were increased to less than $15 a tonne, from previous guidance of less than $14 a tonne, due to lower volumes and increased remediation costs.
DS Smith said it had reached agreement for the proposed sale of two packaging businesses in North Western France and Portugal to International Paper €63m (£54m).
The sales would fulfil the commitment made to the European Commission in relation to the clearance of Smith's acquisition of Papeles y Cartones de Europa, S.A., known as Europac, which completed on 22 January 2019.
Property developer Segro told shareholders that the business "continued to perform well" during the first quarter, with the company securing £21m of new headline rent.
Management further said it had 44 projects under construction, which were expected to generate £57m of annualised rent and were aleady 72% leased, versus the record 73% of pre-letting reached in fiscal year 2018. The developer's vacancy rent meanwhile decreased from 5.2% as of year-end 2018 to 4.4%.