London pre-open: Stocks to drop amid trade, growth worries

London stocks were set for a negative open on Wednesday amid worries about global growth and trade tensions between the US and China, with Brexit still firmly in focus.

The FTSE 100 was called to open 21 points lower at 6,880.

CMC Markets analyst Michael Hewson said: "The easing of trade tensions between the US and China was one of the main reasons behind last week’s strong finish for equity markets, on fragile optimism that both sides would somehow arrive at some accommodation on trade in the coming days, thus averting an increase in US tariffs, which are due to increase from 10% to 25% on 1st March."

However, this optimism was punctured abruptly on Tuesday evening following reports that the White House had cancelled a planned trade meeting with Chinese officials for this week due to ongoing disagreements over intellectual property rules.

"While these reports were refuted by Larry Kudlow, Donald Trump’s chief economic advisor, he did say that the important meeting was the one at the end of the month with Chinese Vice Premier Liu He, which would suggest the potential for failure still remains fairly high," said Hewson.

On home turf, the pound was a touch higher versus the dollar amid hopes that a no-deal Brexit will be avoided.

"The Labour party appears to be hinting that it would support an amendment that extends the deadline, however that still seems some way off given that for that to happen, only one of two things can happen. Article 50 can either be revoked or extended, and it’s not immediately clear how MPs would be able to do that without the governments assent," said Hewson.

"Furthermore an article 50 extension would also need to be approved by the European Union, and while there is nothing to suggest they wouldn’t do so, there would also need to be confidence that an extension would provide a satisfactory end point and conclusion."

On the data front, the CBI industrial trends survey for January is at 1100 GMT.

In corporate news, RPC Group finally confirmed that it has received a take-private offer from US private equity group Apollo, valuing the plastics company at £3.3m.

Apollo's Rome UK bid vehicle has offered 782p per share in cash, with each shareholder also receiving the recently announced 8.1p per share interim dividend.

Antofagasta said fourth quarter copper production rose 16.8% to 220,000 tonnes as a result of higher production at all operations, particularly at Centinela Concentrates which increased production by 68.3%.

Full year production was at the top end of revised guidance, rising 3% to 725,300 tonnes due to higher production at Los Pelambres and Centinela.

Gold production was 90,000 ounces in the fourth quarter, an 87.1% increase on the third quarter due to higher throughput, grades and recoveries at Centinela. Full year production was 210,100 ounces, the top end of guidance.

Vodafone announced that itself and Telefónica UK, trading as O2, have entered into non-binding heads of terms intended to strengthen their existing network sharing partnership.

The telecoms giant said the two firms planned to extend their existing network sharing partnership term, and include 5G technology at joint radio network sites. That would enable both Vodafone and O2 to deploy 5G faster, to offer 5G services to more customers over a wider geographic area, and to do so at a lower cost, it claimed.