London pre-open: Stocks to fall; Sino-US relations remain in focus
London stocks were set to fall at the open on Wednesday following uninspiring US and Asian sessions as investors continue to mull developments in Sino-US trade relations.
The FTSE 100 was called to open 20 points lower at 7,368.
CMC Markets analyst David Madden said: "Xi Jinping, China’s premier, requested that countries use trade talks to promote better relations. A reference was made to the tensions between nations, and the Xi Jinping talked about easing the tensions through dialogue.
"Given that Beijing have been locked in a trade spat with Washington DC for over one year, it was clear the message was aimed at the US. Actions speak lounder than words so when the US dollar traded below the 7 mark against the yuan, traders viewed it as further evidence the Chinese government are keen to edge towards making a deal with the US.
"When trade tensions between the two sides was were running high, Beijing allowed their currency to drift lower against the greenback as a way of getting back at the US, so a firmer yuan bodes well for the possibility of phase of the trade deal being reached."
In UK corporate news, interim revenue at retailer Marks & Spencer fell 2% due to weaker home and clothing sales as the company posted a 17% decline in profits before tax and adjusted items.
Food like-for-like sales grew 0.9% driven by volume, while clothing & home like-for-like sales fell 5.5%, reflecting "first half shape of buy and supply chain issues", M&S said.
Group revenue fell to £4.8bn from £4.9bn. Pre-tax and adjusted items profit was £176.5m, down from £213m a year earlier.
Student accommodation provider Unite Group said its £1.4bn acquisition of Liberty Living from the Canada Pension Plan Investment Board has been unconditionally approved by the Competition and Markets Authority.
The deal is now expected to complete at the end of November.
Sophos swung to an interim loss before tax of $1.5m, compared with a profit of $26.0m in the first half of 2018, as finance and administrative expenses jumped by 62% to $72.3m.
Turnover for the period rose by 5% to $365.8m, driven higher by 8% growth in subscription revenue and a particularly strong performance in the Americas.