London open: Stocks retreat after China data as investors eye Brexit vote

London stocks fell in early trade on Monday following the release of disappointing Chinese trade data, as investors eyed the latest Brexit-related headlines ahead of this week's Commons vote.

At 0830 GMT, the FTSE 100 was down 0.4% to 6,887.73, while the pound was off 0.2% against the dollar at 1.2825 and 0.1% lower versus the euro at 1.1183.

Data released earlier showed that imports in China fell 7.6% on the year in December, while exports were down 4.4%, versus expectations for 3% and 5.4% increases, respectively. The figures also showed that China's trade surplus with the US hit a record high last year.

Neil Wilson, chief market analyst at Markets.com, said: "Dismal Chinese export data, the worst in two years, will do nothing to boost risk sentiment and could stoke more concerns about the global economy, particularly as it’s all so sensitive to the US-China trade war."

On home turf, Brexit was the main focus as Theresa May looked set to lose the Commons vote on her deal on Tuesday.

According to press reports over the weekend, MPs from the Conservatives, Labour, Liberal Democrats and the SNP have drawn up legislation that would deliver a final say on Brexit. The two bills, to establish the legal framework for a referendum and decide what is on the ballot paper, could be put forward as early as Wednesday.

Meanwhile, Labour leader Jeremy Corbyn is pushing for a general election if May's Brexit deal is voted down in the vote.

Wilson said: "Likely course of action right now seems to be 1) May loses vote, 2) no confidence motion that passes as there are enough ultra-Remain Tory rebels prepared to risk a Labour government rather than let the UK leave without a deal, 3) a general election is called and 4) Brexit is delayed to allow time for the poll, 5) dependent on that outcome another referendum is called.

"If not a second referendum, the hard Brexit camp is defeated and a much ‘softer’ format is agreed. In effect Parliament wrests control of the executive - the irony is that it is the executive carrying out the will of the people, not Parliament."

Theresa May is due to make a speech later on Monday at a factory in Stoke-on-Trent, during which she is expected to warn that Brexit may be scrapped if MPs vote against her deal.

Housebuilders were the standout gainers after JPMorgan Cazenove upped its stance on the UK sector to 'overweight' from 'underweight', with Berkeley, Persimmon, Taylor Wimpey and Barratt all higher.

JD Sports Fashion surged to the top of the FTSE 250 as it said sales growth picked pace over Christmas, with the retailer also encouraged by the performance in the US as it integrates its Finish Line acquisition. Total like-for-like sales growth in the Sports Fashion for the 48 weeks to 5 January topped 5%, up from 4% in the first half of the year, while gross profit margins were maintained at prior year levels.

Acacia Mining ticked higher as it reported gold production of 130,581 ounces for the fourth quarter, bringing the full year total to 521,980 ounces, “substantially ahead” of initial production guidance for the year of 435,000-475,000 ounces.

PageGroup lost ground as the recruiter posted a jump in total fourth-quarter profit but a decline in full-year profit from its UK business.

Elsewhere, Dechra Pharmaceuticals nudged lower after a trading update, while Premier Oil dropped after news over the weekend that it is preparing to tap shareholders for cash to help it buy about $1.5bn of fields in the North Sea.

Burberry was boosted by an upgrade to 'neutral' at Bank of America Merrill Lynch. However, Paddy Power was knocked lower by a downgrade to 'equalweight' at Barclays, Next was hit by a downgrade to 'underperform' at Credit Suisse and Countryside Properties was weaker after JPMorgan cut the stock to 'underweight'.

Market Movers

FTSE 100 (UKX) 6,887.73 -0.44%
FTSE 250 (MCX) 18,443.80 -0.53%
techMARK (TASX) 3,375.61 -0.51%

FTSE 100 - Risers

Berkeley Group Holdings (The) (BKG) 3,830.00p 2.13%
Burberry Group (BRBY) 1,775.00p 1.34%
Persimmon (PSN) 2,232.00p 1.32%
Taylor Wimpey (TW.) 157.95p 1.22%
Barratt Developments (BDEV) 508.00p 0.91%
Royal Bank of Scotland Group (RBS) 227.40p 0.75%
Smurfit Kappa Group (SKG) 2,156.00p 0.65%
Admiral Group (ADM) 2,038.00p 0.64%
Smiths Group (SMIN) 1,456.50p 0.55%
Ocado Group (OCDO) 865.60p 0.51%

FTSE 100 - Fallers

Paddy Power Betfair (PPB) 6,360.00p -2.60%
Melrose Industries (MRO) 166.80p -2.34%
GVC Holdings (GVC) 703.25p -2.26%
Next (NXT) 4,665.00p -1.93%
Anglo American (AAL) 1,787.40p -1.50%
Antofagasta (ANTO) 824.00p -1.46%
HSBC Holdings (HSBA) 640.30p -1.13%
Standard Chartered (STAN) 610.60p -1.02%
BHP Group (BHP) 1,595.00p -1.02%
Royal Dutch Shell 'A' (RDSA) 2,339.50p -0.93%

FTSE 250 - Risers

JD Sports Fashion (JD.) 421.30p 6.34%
Energean Oil & Gas (ENOG) 651.01p 2.55%
Dunelm Group (DNLM) 696.00p 2.43%
EI Group (EIG) 203.00p 1.81%
Halfords Group (HFD) 217.60p 1.68%
Civitas Social Housing (CSH) 104.50p 1.46%
Renishaw (RSW) 4,136.00p 1.42%
IP Group (IPO) 111.20p 1.28%
Stobart Group Ltd. (STOB) 162.50p 1.06%
Serco Group (SRP) 115.50p 0.87%

FTSE 250 - Fallers

Premier Oil (PMO) 73.55p -7.43%
Vivo Energy (VVO) 127.82p -4.44%
Pagegroup (PAGE) 446.44p -3.99%
Genus (GNS) 2,258.00p -3.09%
Rathbone Brothers (RAT) 2,296.00p -2.71%
Sanne Group (SNN) 552.00p -2.65%
Spirent Communications (SPT) 119.20p -2.61%
Tullow Oil (TLW) 196.85p -2.45%
Paragon Banking Group (PAG) 404.20p -2.41%
Countryside Properties (CSP) 322.60p -2.24%