London pre-open: Stocks seen lower as US imposes sanctions on Iran

London stocks were set for a downbeat open on Tuesday after the US imposed sanctions on Iran.

The FTSE 100 was called to open 26 points lower at 7,390.

David Madden, market analyst at CMC Markets, said: "Tensions between the US and Iran have ticked up after President Trump singed an executive order imposing ‘hard-hitting’ sanctions on Iran as a retaliation for downing a US drone.

"Washington DC claimed the US will maintain its tough stance against the regime until it halts its ‘dangerous activities’. The US leader balanced out the statement by saying he doesn’t ‘seek conflict with Iran’. Tehran claimed that diplomatic relationships could be closed ‘forever’ but that sounds like bluster.

"The rising tensions actually played a role in the sell-off in the oil market as traders began to fear that "demand for oil will fall. The G20 summit is likely to play a big role in oil’s next move as a fractured trading relationship between the US and China has added to fears that oil demand will decline in the medium-term."

On the data front, the CBI distributive trades survey for June is at 1100 BST.

In corporate news, oil services company Petrofac said trading was in line with previous guidance with new order intake of $1.7bn in the year to date.

Net debt was expected to be around $100m at June 30, compared with $90m at the end of 2018.

Energean Oil and Gas has signed a detailed agreement with Israel Natural Gas Lines (INGL) for the transfer of title of the near-shore and onshore part of the infrastructure that will deliver gas from the Karish and Tanin floating production, storage and offloading (FPSO) facilities into the Israeli national gas transmission grid.

The FTSE 250 firm said that as consideration, INGL would pay Energean 369 million Israeli new shekels ($102m), which would be paid in accordance with milestones detailed in the agreement.

Renishaw confirmed that group engineering director Geoff McFarland, a veteran of more than two decades at the engineering firm, will resign as a director of the board with effect from 30 June due to family reasons.

McFarland will remain at Renishaw, taking on a part time role as director of group technology.