London pre-open: Stocks seen lower amid trade war fears

London stocks looked poised for a downbeat open on Thursday amid fresh concerns about Sino-US trade relations.

The FTSE 100 was called to open 31 points lower at 6,837.

Trade war fears were set to undermine sentiment following reports that the US is investigating Chinese tech giant Huawei for stealing trade secrets from US business partners.

"The move comes as US-Sino relations were improving amid a 90-day truce," said London Capital Group analyst Jasper Lawler. "It goes right to the heart of the unresolved IP issues with China. China is unlikely to shrug this off which is creating a risk-off environment. Signs of retaliation from China could see stocks sink further."

On home turf, Theresa May survived the no-confidence vote in her government on Wednesday evening so attention will now turn to her Brexit 'Plan B', which she has until 21 January to put forward.

"Given the extent of the division in Parliament it's difficult to see how anything other than extending Article 50 or a second referendum will help towards ending the deadlock," said Lawler.

Housebuilders could see some pressure as the latest survey from the Royal Institution of Chartered Surveyors showed that the outlook for the housing market over the next three months is the worst it has been for 20 years, with a net balance of 28% of members expecting sales to drop.

Meanwhile, the net balance of surveyors reporting that house prices have risen over the last three months fell to -19 in December from -11 the month before.

Pantheon Macroeconomics said: "Surveyors clearly think that Brexit uncertainty is to blame; while they expect prices to keep falling at a similar rate over the next three months, the 12-month price expectations balance turned positive in December for the first time since May.

"We continue to think that Brexit uncertainty will subside soon, as the government is forced to pivot towards a soft Brexit with only limited economic consequences; that shift, in turn, should help consumers' confidence to recover and restore some life to the housing market. Nonetheless, the MPC will have to start raising Bank Rate at a faster rate than in recent years soon, now that very little slack remains in the economy and underlying inflation is rising."

In corporate news, technology group Sage reiterated full year guidance as it said first quarter guidance organic revenue increased by 7.6% to £465m.

Recurring revenue increased by 10.5% to £387m, underpinned by software subscription growth of 27.7% to £237m, building on the momentum generated at the end of the 2018 full year as the business continues to focus on subscription, assisted by a softer comparator in the first quarter last year.

Whitbread confirmed that profits are likely to remain flat for the next year but said it will begin buying back £500m worth of shares after completing the sale of Costa Coffee earlier than expected.

UK like-for-like sales in the third quarter were down 0.2% at its Premier Inns chain, slowing growth for the year to date to 2.5%.