London pre-open: Stocks to open lower after worse-than-expected China data

London stocks are expected to open lower on Wednesday after China trade data came in worse than expected.

The FTSE 100 is expected to open down by 14 points.

China's global trade surplus widened to $49.98bn in May from April's $45.6bn, missing estimates of $55.70bn. Exports fell 4.1%, compared to analysts’ forecast for a 4% drop and the previous month’s 1.8% slide. Imports dipped 0.4% in May but it was an improvement on April’s 10.9% plunge and better than expectations for a 6.8% decrease.

“With recent Chinese data also showing signs of weakness after a decent end to the first quarter, there is a worry that both the US and Chinese economies are hitting a soft patch in the second quarter at a time when central bank arsenals are starting to look a little depleted,” said Michael Hewson, chief market analyst at CMC Markets.

After the opening bell, UK industrial and manufacturing production data is due at 0930 BST followed by the latest NIESR gross domestic product estimate at 1500 BST, and government data on US weekly crude inventories at 1530 BST.

Meanwhile, oil prices continued to rally as supply disruptions in Nigeria and Canada helped ease the global glut of crude output.

The American Petroleum Institute said late on Tuesday that commercial crude inventories fell by 3.6 million barrels last week, compared with expectations for a 2.7 million barrel draw.

At 0734 BST, Brent crude was up 0.05% to $51.47 per barrel and West Texas Intermediate was up 0.21% to $50.47 per barrel.

On the company front, supermarket heavyweight Sainsbury's said first quarter total retail sales rose 0.3%, excluding fuel, and were down 0.1% including petrol sales. Like-for-like Retail sales fell 0.8% excluding fuel and down 1% including petrol.

Online electrical retailer AO World reported a 25.7% increase in full year revenue to £599.2, driven by growth in the UK and German businesses. However, as previously guided, the group posted an operating loss of £10.6m, compared to £2.2m the previous year, reflecting investment and trading losses incurred in Germany and start-up costs in other European territories of £2.3m.

Quick-service food operator Domino’s Pizza Group announced a new strategic investment on Wednesday, committing £24m to acquire “significant minority interests” in Domino’s Iceland, Norway and Sweden while retaining existing strong local management. The FTSE 250 firm said it also agreed a route to future majority ownership and control, in its negotiations with current owners Birgir Bieltvedt - the chairman and founder of Domino’s Iceland - and other investments.