London pre-open: Stocks to rise despite Wall Street losses
London stocks were set to rise at the open on Tuesday as investors continued to mull trade developments between the US and China and eyed the release of key UK jobs data.
The FTSE 100 was called to open 16 points higher at 7,179.
Stocks on Wall Street suffered heavy losses on Monday after China retaliated against the US by announcing tariffs on $60bn of US goods. Both the Dow and the S&P 500 endured their worst day since 3 January.
CMC Markets analyst Michael Hewson said that with the EU also threatening its own retaliation if Trump implements tariffs on EU autos at the end of this week, "stocks have seen valuations put into the shredder, with large falls across the board, as in the space of five days we’ve seen all the April gains for US markets disappear".
Hewson added: "Despite the heavy falls in Asia we have seen a pullback from the lows, after President Trump kept open the prospect of some form of deal in the next 'three to four weeks', when speaking at a White House event, as well as saying that he was prepared to meet President Xi. This pullback from the lows is likely to see European markets open slightly higher this morning, but it is unlikely to change the prospect of further volatility in the days ahead."
Investors were likely to remain on edge amid news that Trump is considering imposing tariffs on a further $300bn of Chinese imports - a move that could significantly impact the Chinese economy.
On home shores, the ILO unemployment rate, claimant count and average earnings are due at 0930 BST.
Unemployment for the three months to March is expected to remain at its lowest levels since the mid-1970s at 3.9%. Meanwhile, wage growth is expected to tick just a touch lower to 3.3% from 3.4% in February.
"This is still well above the headline CPI inflation rate of 1.9%, meaning that once again consumers are seeing real wages growth, for the eighth month in succession," said Hewson.
In corporate news, Vodafone rebased its full-year dividend to €0.09 from €0.15 for the 2018 fiscal year, implying a final dividend of €0.04. Nevertheless, the company posted a 3.1% rise in adjusted full-year earnings before interest, taxes, depreciation and amortisation to reach roughly £12.25bn (€14.14bn), which was more or less in line with the expectations of analysts in the City, although on an as reported basis they declined by 4.1%.
Also on an as reported basis, the company´s free cash flow jumped by 9.1% to £3.50bn (€4.04bn). For 2020, the telecoms carrier forecast adjusted EBITDA in a range of €13.8bn-14.2bn, implying low single digit organic growth. Free cash flow pre-spectrum was pegged at up by at least €5.4bn. Separately, overnight the outfit announced the sale of Vodafone New Zealand Limited to a consortium for an enterprise value €2.1bn.
DCC's annual profit rose as acquisitions helped the sales and support services group overcome mild weather that affected its heating businesses.
Pre-tax profit for the year to the end of March rose 3.3% to £326.7m as revenue from continuing operations increased 16% to £15.2bn. Adjusted operating profit from continuing operations rose 20.1% to £460.5m.
Metrology and healthcare technology group Renishaw said pre-tax profits for the nine months to-end March 2019 fell 18.8% to £84.8m as revenues were flat.
The company said it now expected full year revenue to be in the range of £580m - £600m, adjusted pre-tax profit of £105m - £120m and statutory pre-tax profit of £111m - £126m.