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London pre-open: Stocks seen lower ahead of UK inflation data

By Michele Maatouk

Date: Wednesday 17 Jul 2019

(Sharecast News) - London stocks were set to drop at the open on Wednesday amid renewed concerns about Sino-US trade relations and ahead of the release of key UK inflation data.
The FTSE 100 was called to open 18 points lower at 7,559.

On the macroeconomic front, the retail price index, producer price index and consumer price index are all due at 0930 BST.

More broadly, relations between the US and China were likely to be in focus again after US President Trump said on Monday that the two countries have a "long way to go" to work out a trade deal and warned that he could slap tariffs on $325bn of Chinese goods if he wants.

CMC Markets analyst David Madden said: "The announcement was aimed at Beijing, but the Chinese authorities don't have a history of giving in to his threats. US equity markets ended a little lower last night, and stocks in Asia are in the red as trade worries resurface."

In corporate news, BHP said iron ore output recovered in the fourth quarter after cyclone Veronica hit production in March, adding that output could grow by up to 6% in the 2020 financial year.

The world's biggest miner forecast a jump in Australian production to 273m - 286m tonnes in fiscal 2020. Annual output fell to 269.6m million tonnes from 275m.

Water and wastewater company Severn Trent said it had made a "good start" to the financial year in a trading update on Wednesday, with no material change to current year business performance or outlook since its results in May.

The group said it continued to expect to deliver full-year trading performance in-line with its expectations and prior guidance. It added that it remained on track to deliver at least £25m in customer outcome delivery incentive outperformance payments this year.

Johnson Matthey kept full year guidance unchanged but indicated that its performance will be more heavily weighted to the second half after its first quarter sales remained flat, with growth from its clean air division offset by lower sales from efficient natural resources (ENR) and health.

Mid to high single digit growth continues to be anticipated as the specialty chemicals company targets improved efficiency and performance from ENR.


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