London pre-open: Stocks seen higher as investors eye US bank earnings
London stocks looked set for a firmer open on Friday following a mostly positive Asian session as investors look ahead to some key US bank earnings and digest the release of mixed Chinese data.
The FTSE 100 was expected to open 30 points higher than Thursday’s close at 7,322.
CMC Markets’ Michael Hewson said: “Overnight markets got a look at the latest trade outlook for the Chinese economy, after some mixed November numbers, and to a large extent they were a little disappointing, particularly on the exports side, and raised concerns a slowdown in global demand. Imports rose 6.7% in November reflecting some improvement in internal demand, but exports were a little disappointing, rising 0.1%.
“Given the recent surge in commodity prices which appeared to peak in December, driven largely by Chinese demand it would be surprising if imports for December were to disappoint, and while they came in below Novembers 6.7% they still beat expectations coming in at 3.1%.
“Exports on the other hand dropped sharply by 6.1%, down from the 0.1% gain seen in November, and this slide should raise concerns that demand may well be sliding again in the global economy, particularly in Europe.”
On the data front, the Bank of England credit conditions survey is at 0930 GMT. In the US, retail sales and the producer price index are at 1330 GMT, while the Michigan consumer sentiment index and business inventories are at 1500 GMT.
Earnings are due in the US later from banking heavyweights JP Morgan, Bank of America and Wells Fargo.
In UK corporate news, Irish building materials company Grafton Group’s revenue rose as it expanded the Selco merchanting brand in the UK.
Revenue surged 13.4% in the year ended 31 December to £2.51bn, compared to last year, or 10.4% in constant currency.
Mitchells & Butlers posted a first quarter trading statement covering the 15 weeks to 7 January on Friday, with like-for-like sales growth for the year-to-date improving to 1.7%.
The FTSE 250 firm said trading over the festive period was particularly strong across all brands, with like-for-like sales growth of 4.7% for the four weeks to 7 January. Total sales increased by 2.3% in the year-to-date.