London pre-open: Stocks seen muted as investors mull China inflation

London stocks were set for a muted open on Monday following a mixed session in Asia.

The FTSE 100 was called to open three points lower at 7,254.

CMC Markets analyst Michael Hewson said: "European markets underwent a shocker of a week last week, posting their biggest declines since March, despite a modest rebound on Friday.

"With economic data continuing to look on the soft side and central banks showing little sign of easing up when it comes to interest rate rises there was little to cheer for markets in Europe, with concerns about weakness in the Chinese economy adding to the gloom."

Data released earlier by China’s National Bureau of Statistics showed that the consumer price index slowed to 0% in June year-on-year from 0.2% in May, coming in below consensus expectations for it to be unchanged.

Meanwhile, producer price inflation fell 5.4% year-on-year in June, from 4.6% a month earlier. Analysts were expecting a 5% decline.

Pantheon Macroeconomics said: "Surplus production capacity is driving sharper falls in Chinese producer prices, as policymakers mull over additional stimulus measures.

"Prices are falling upstream and downstream, though the most pronounced drops are upstream, in raw materials and mining. We expect the Q2 industrial capacity utilisation data due next week to show further signs of excess capacity, as a result of weak demand coupled with previous investment in factories and mines."

In corporate news, BT Group announced that its chief executive Philip Jansen had decided to step down from his position in the next 12 months, after spending four-and-a-half years in the role.

It said that in light of Jansen's forthcoming departure, its nominations committee had initiated a formal succession process to identify a suitable candidate for the role of chief executive.

The news came amid reports the FTSE 100 telecoms company was in the sights of its major shareholder Deutsche Telekom for a possible takeover.

Self-storage company Big Yellow reported a 6.7% rise in first quarter revenue, driven by higher rents.

Sales for the three months to June 30 came in at £48.1m compared with £45.1m a year earlier. On a like-for-like basis they rose 5.4% to £47m.

The average achieved net rent per square foot rose 9% to £32.74.