London pre-open: Stocks to edge lower amid trade worries; Next raises guidance
London stocks were set to edge lower at the open on Tuesday amid ongoing worries about the trade conflict between the US and China.
The FTSE 100 was called to open eight points lower at 7,450.
Investors will continue to keep an eye on developments between the US and China following reports that China’s vice commerce minister Wang Shouwen said at a news conference on Tuesday that it was difficult to go ahead with negotiations at the moment and that the discussions would depend on the will of the US.
London Capital Group analyst Jasper Lawler said: "Asian markets struggled as investors digested escalated tensions in the next chapter of the growing trade spat. Both sides are digging their feet in, with tariffs being levied. Hope for negotiating a way out of this impasse is declining. The latest market moves highlight just how difficult it is to trade these escalating trade tensions.
"On the announcement of these latest tariffs the markets moved higher, given that the tariffs were lower than what traders had been expecting. Fast forward to the application of the ‘lower’ tariffs and the market dives. The markets have tried hard to shrug off the implications of an escalating trade spat on global trade and growth but this is becoming harder with each fresh round of tariffs and will slowly but surely take its toll on investor sentiment."
Meanwhile, political instability in the US was also a concern following reports on Monday that Deputy Attorney General Rod Rosenstein was about to quit or be sacked. These reports were later dismissed by the White House, however, with Rosenstein due to meet Trump on Thursday.
Closer to home, Brexit was still the main focus as PM Theresa May prepared to meet Trump on Wednesday at the United Nations General Assembly in New York to discuss trade and Brexit.
In corporate news, Next has raised its guidance for annual profit after trading in August and early September was better than expected.
Group pre-tax profit will be £727m in 2018, broadly in line with the year before, Next predicted. In May it estimated profit would fall to £717m. Next has raised its guidance for annual profit after trading in August and early September was better than expected.
Imperial Brands said its tobacco business was enjoying "much stronger" sales half and said it plans to launch its heat-not-burn tobacco product early in 2019.
Ahead of a capital markets event in London on Tuesday, the FTSE 100 group said it remained on track to deliver full year constant currency revenue and earnings growth in line with its previous guidance range.
Close Brothers reported a "good performance" for the year ended 31 July on Tuesday, with a 4% increase in adjusted operating profit to £278.6m, an improvement of 5% in adjusted basic earnings per share to 140.2p and a return on equity of 17.0%.
The FTSE 250 company said the proposed full year dividend per share of 63.0p represented growth of 5%.