London pre-open: Stocks to edge lower as US-China hopes fade
London stocks were set to edge lower at the open on Tuesday as optimism about easing trade tensions between the US and China faded.
The FTSE 100 was called to open six points lower at 7,030.
Sino-US relations were in focus again after US President Trump said he expects to raise tariffs on China to 25% from the current 10%.
"His comments reflect how little progress has been made in trade talks so far and highlights the low probability for any deal to be agreed with China’s President Xi when the two Presidents meet at this week’s G20 summit," said London Capital Group analyst Jasper Lawler.
"Markets across Asia showed considerable resilience despite trade tensions returning to darken the outlook. Flows into the safe haven Japanese yen have only started to increase marginally in early trade after the yen actually closed the previous session lower versus the dollar.
"The resilience seen in the Asian session is not looking spill over into the European session, with bourses across Europe pointing to a softer start."
On the data front, the CBI distributive trades survey for November is at 1100 GMT.
In corporate news, Thomas Cook has withdrawn its dividend as it cut its annual profits guidance for the third time this year.
The tour operator, having only just issued a second profit warning in September, said its final result was expected to be around £30m lower than previously guided due to a number of legacy and non-recurring charges.
Quality assurance provider Intertek Group said group revenue rose 4.8% at constant exchange rates to £2.31bn and 0.5% at actual rates in the 10 months to October 31 as it reaffirmed its 2018 target of good organic revenue growth with moderate margin progression at constant currency and strong cash conversion.
Year-end net debt guidance was unchanged £800m-850m, assuming no further acquisitions and no significant forex changes, the company said.
Bakery chain Greggs updated the market on its trading on Tuesday, reporting that the improved trading performance it reported in its third quarter update had strengthened further during October and to date in November.
The FTSE 250 company said that in the eight weeks to 24 November, total sales grew 9%, up from 8.2% at the same time last year, and like-for-like sales in company-managed shops increased by 4.5%, in line with 2017. In the year-to-date, total sales had grown 6.6%, and like-for-like sales increased 2.5%.