London pre-open: Stocks seen lower as growth, Sino-US trade worries weigh

London stocks were set to drop at the open on Wednesday, taking their cue from downbeat US and Asian sessions amid ongoing worries about Sino-US trade relations and renewed concerns about global growth.

The FTSE 100 was called to open 29 points lower at 7,237.

London Capital Group analyst Jasper Lawler said risk aversion has been on the rise as investors grow increasingly concerned over the impact that the ongoing trade dispute is having on the global economy.

“Weakening macro data is heightening these concerns fuelling fears of a global recession. An unresolved Brexit and rising tensions between Rome and the European Commission are adding to the gloomier outlook,” he said.

“Asian stocks dropped overnight following an afternoon selloff in the US, amid another flashing warning from the bond market. A rally in US 10-year treasuries saw yields slump to multi-year lows resulting in the inversion of the yield curve for the second time this year. It's a repeat of the warning shot first fired in March this year. That was the for the first time since 2007.

“Bonds are rallying as a haven asset, dragging the yields lower as investors fret over stalled US-China trade talks. Sentiment is taking a turn for the worse as trade tensions between the two powers show no signs of easing.

In UK corporate news, industrial and engineering software provider Aveva said full year pre-tax profits rose 21.7% to £46.7m driven by increasing demand for industrial software and good sales execution, including an increase in multi-year commitments from key customers.

Experian announced the appointment of Mike Rogers, an independent non-executive director of the company, as its chairman effective from the end of its annual general meeting on 24 July.

The company said he was succeeding Don Robert. Rogers joined the Experian board in July 2017, and was also currently a non-executive director of the Royal Bank of Scotland Group.