London pre-open: Stocks seen lower after weak China data; Brexit in focus

London stocks were set to drop at the open on Monday following the release of disappointing Chinese trade data, as investors eye the Commons vote on Theresa May's Brexit deal.

The FTSE 100 was called to open 38 points lower at 6,880.

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.

"As far as China’s business with the US is concerned the trade surplus rose to a 10-year high, even if the overall surplus was lower. Disappointment over this morning's data has seen Asia markets slip back and will see European markets open lower this morning," said CMC Markets analyst Michael Hewson.

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

"With the battle lines being clearly drawn between the various factions in both government and opposition parties, we could face the very real possibility that the government’s own MPs could bring about its own demise, if they feel that it would serve the purpose of trying to either deliver or prevent Brexit," said Hewson.

According to press reports over the weekend, MPs from the Conservatives, Labour, Liberal Democrats and 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 corporate news, sales growth picked pace over Christmas at JD Sports Fashion, 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 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.