London pre-open: Stocks seen higher after China trade data

London stocks were set for a positive open on Wednesday, taking their cue from an upbeat session in Asia after encouraging Chinese trade data.

The FTSE 100 was seen starting 33 points higher than Tuesday’s close at 6,275.

China’s yuan-denominated exports rose 18.7% in March compared from the same month the year before, compared with a 20.6% drop in February. Yuan-denominated imports, meanwhile, fell 1.7% on the year compared with an 8% decline the previous month.

In dollar terms, exports grew 11.5% in March from the same month a year earlier, which was a much bigger jump than forecast.

“The surge in exports adds to the improving outlook for China indicated by moderating producer price inflation and a rebound in business confidence data. The pickup in exports was likely supported by the devaluation of the yuan at the start of the year which made Chinese goods relatively cheaper than domestic options abroad,” said CMC Markets’ Jasper Lawler.

“The stabilisation of China’s imports should be positive for FTSE-listed mining companies,” he added.

There are no major UK data due on Wednesday, but in the US, MBA mortgage applications are at 1200 BST, retail sales at 1330 BST and business inventories at 1500 BST.

Tesco back in the black

Tesco broke back into the black with a £162m pre-tax profit that marked a turnaround from the previous year's record £6.3bn loss, also delivering the first annual volume growth in five years.

The UK's largest supermarket generated a 0.9% increase in UK like-for-like sales in the fourth quarter, its first growth in three years, contributing to group LFL growth of 1.6% for the quarter.

Fresnillo said first quarter gold production was up 26.3% to 230,000 against the same period last year and up 6.5% when compared with the fourth quarter of 2015.

This was mainly due to a higher speed of recovery at Herradura now steady state has been reached, and a higher speed of recovery at Noche Buena, the company said in a production update.

Quarterly silver production (including the Silverstream) slightly decreased by 1.7% year-on-year as a result of the expected lower ore grade at Saucito due to the unusually high ore grade found in the first quarter of 2015, which was above reserve average.

WH Smith reported a jump in earnings on Wednesday, with profit across the FTSE 250 retailer improving in the six months to 29 February.

Group profit before tax improved 11% to £80m from £72m, while diluted earnings per share were up 13% to 57.4p from 50.8p.

Smith’s profit in travel trading was up 9%, and its high street trading saw profit improve 6%.

Sales were mixed, however, with group total sales up 4%. Travel sales were up 11%, while the high street division saw sales fall 1%.