London pre-open: Stocks to follow Asia lower amid ongoing trade war woes
London stocks were set for a weaker open on Monday, taking their cue from losses in Asia amid ongoing worries about a trade war between the US and China.
The FTSE 100 was called to open 36 points lower at 7,646.
London Capital Group analyst Jasper Lawler said: "A ramping up in tit for tat trade measures are sending shivers down the spine of the market.
"The markets shrugged off Trump’s retaliation on Friday, threatening 20% tariffs on EU cars. In the latest escalation of the trade war Trump has decided to take aim at Chinese investments. A draft series of restrictions on inbound Chinese investments are due to be published later this week, in a move which could have great long-term consequences on the US – Sino economic relationship. Once again details remain very sketchy, with the scope of such a measure still under discussion. It is now very difficult to get away from the fact that neither side has any intention of backing down in this game of economic 'chicken'."
Meanwhile, EU summit is due to kick off on Thursday, with Brexit set to be in focus again.
Lawler said: "Last week pound traders celebrated Theresa May facing down Tory rebels to prevent MPs from having a meaningful vote should there be a no deal Brexit. Over the weekend, hard-line Brexiteers ramped up the pressure on Theresa May for a no deal plan. Progress on a Brexit deal has been alarmingly slow and with the clock ticking, Brexiteers view this as the only way to ensure a good break from the Brussels. Any signs of a harder Brexit are expected to weigh on demand for the pound, particularly given the lack of high impacting economic data until later in the week, potentially bringing $1.31 back into target."
In corporate news, serviced office group IWG has been approached by another private equity suitor about a potential takeover, with Terra Firma entering the fray.
IWG's board, which notified of the approach on Saturday after it had been leaked in the press, said it was evaluating a possible cash offer from Terra Firma Investments.
Eastern Mediterranean-focussed exploration and production company Energean Oil and Gas said on Monday that is has made the decision to drill an exploration well in the Karish North prospect, offshore Israel, with a planned spud date before the end of March 2019, subject to necessary approvals.
The company said the drilling would exercise the first of seven optional wells included in the Stena Drilling contract.
Synthomer announced a refinancing of its existing bank facilities, consisting of an offering of €300m (£263.5m) in seven-year unsecured senior notes, and a new €300m four-year revolving credit facility.
The group said the proceeds of the issue and sale of the notes would be used, together with cash on hand and borrowings under the new revolving credit facility, to repay all amounts outstanding under its existing revolving credit facility, repay amounts outstanding under its existing term loan and pay certain costs, expenses and fees related to the refinancing.