London pre-open: Stocks to fall on weak China data

London stocks were set to fall at the open on Monday following the release of disappointing Chinese data.

The FTSE 100 was called to open 22 points lower at 7,396.

CMC Markets analyst Michael Hewson said: "This morning’s April retail sales and industrial production data from China are a case in point. Last week the April trade numbers showed a sharp fall in both imports and exports as transportation difficulties and port stoppages impacted the flow of goods and services, pointing to the significant disruption caused by China’s current covid policies.

"In March, retail sales in China declined by -3.5%, the first decline since July 2020 and the biggest decline since April 2020 when China was coming out of its first nationwide lockdown.

"Today’s April numbers showed another steep decline, sliding -11.1%, an even bigger decline than the -6.6% fall that was expected. Industrial production also slowed sharply, falling -2.9%, against an expectation of a small rise of 0.5%.

“These numbers are unlikely to improve significantly in the coming months given that China is unlikely to alter its zero-covid policy, given the vulnerability of its health service to too many infections, which means that after a poor Q1, Q2 could well be even worse.

"The poor nature of these numbers, along with the probability of how much improvement can be expected given China’s zero-covid policy Asia markets have seen a mixed start to the week, which looks set to translate into a lower open for markets here in Europe."

In corporate news, High Street baker Greggs has posted a 15.8% rise in like-for-like sales in the 10 weeks to May 14 at its company-managed stores, but said it expected figures to normalise against comparisons with more “robust” trading periods last year.

Total sales for the period rose to £495m from £378m. The company, famed for its range of sausage rolls and other pastries, held guidance, but said cost pressures were increasing as a result of inflation and the cost-of-living crisis.

Credit reference agency Experian has agreed to acquire a 51% stake in Brazilian fintech group MOVA Sociedade de Empréstimo entre Pessoas as part of a BRL 40.0m (£6.45m) cash deal.

Experian, which said that it had purchased the stake from private investor Érico Sodre Quirino and founder and chief executive Roberto Tesch, highlighted that it also held a call option to acquire the remaining 49% of MOVA between 2026 and 2028, whilst the sellers had also put an option exercisable during 2029.