London pre-open: Stocks seen lower after downbeat US, Asian sessions

(Sharecast News) - London stocks were set to fall at the open on Wednesday following downbeat sessions in the US and Asia and some disappointing data. The FTSE 100 was called to open 65 points lower at 7,235.

CMC Markets analyst Michael Hewson said: "Last night's weak US close looks set to translate into a lower European open, although today's weak Asia session has also played a part after some disappointing China trade data.

"It's becoming increasingly difficult to feel optimistic about the outlook for the Chinese economy as we head into the winter months. With 21.5m people already locked down in Chengdu, and new restrictions being imposed in places like Guiyang, in Guizhou province, as well as Shenzhen, it's hard to see a scenario for a significant economic pickup much before next year.

"This morning's latest trade numbers for August merely serve to underscore how weak domestic demand still is, and how far away that end of year GDP target of 5.5% is. The target may well have been downgraded to an aspiration only last month, but its further away than ever after today's data and we could be lucky to see half that number at this rate. Imports data has been weak for several months already, rising 2.3% in July, up from 1% in June. Today's August numbers suggest a continued lack of confidence in the part of the Chinese consumer as well as a lack of demand, slowing to a weaker 0.3%, well below expectations of 1.1%.

"Exports have been slightly more resilient recovering to 18% in July, and beating expectations after a weak Q2, helping to push the trade surplus ever higher. These also disappointed in August, coming in at 7.1%, well below expectations of 13%."

In corporate news, Barratt Developments posted a rise in full-year profit and revenue as completions recovered to pre-pandemic levels.

In the year to 30 June, adjusted pre-tax profit grew 14.7% to £1.05bn, with revenues up 9.5% at £5.27bn, as completions increased 3.9% to 17,908.

The housebuilder said it had "made excellent progress in a year of strong housing demand".

Elsewhere, retailer WH Smith said it had continued to see a "strong performance" from its travel unit in the second half, with group revenue coming in "comfortably in excess" of pre-Covid levels.

WH Smith said that despite ongoing disruption, its travel businesses had continued to benefit from the recent recovery in passenger numbers across all of its key travel markets and highlighted that it now expects its full-year results to be in line with recently upgraded expectations.