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CATEGORY: MARKET REPORT - PRE-OPEN

London pre-open: Stocks seen lower amid China-US tensions

Fri 29 May 2020

LONDON (SHARECAST) - (Sharecast News) - London stocks were set to fall at the open on Friday amid growing tensions between the US and China.
The FTSE 100 was called to open 50 points lower at 6,168.

CMC Markets analyst Michael Hewson said: "Having spent most of this week ignoring the prospect of an escalation of US, China tension over Hong Kong, despite various smoke signals throughout the week suggesting a confrontation was brewing, US markets turned tail sharply late last night on reports that President Trump was going to be holding a press conference later today on China.

"Earlier this week US Secretary of State Mike Pompeo said that the US no longer considered Hong Kong as no longer autonomous from China, and as such would mean that the region would no longer be subject to the favourable trade relationship currently in place.

"The US house also passed a bill, earlier this week authorising sanctions against senior Chinese officials for human rights abuses, against Muslim minorities, so today's press conference could well up the ante further, if President Trump signs off on that bill as well as implementing further measures that might hint that the US is keen to send the Chinese a message.

"This sharp reversal in the last hour of US trading, merely goes to show that markets not only see what they want to see and hear what they want to hear, but that they also choose when they want to as well."

In corporate news, B&M European Value Retail reported a rise in sales in the first eight weeks of the new fiscal year as locked-down Britons took advantage of the sunny weather to do home repairs and gardening during the coronavirus crisis.

Like-for-like sales rose 22.7% in the period, while the company also reported a strong end to fourth quarter sales as customers packed into stores during the wave of panic buying in March to stockpile groceries, driving a 6.6% rise.

Flutter Entertainment has raised more than 800m in a share placing to reduce debt and be ready to expand its US business.

The gambling company, which owns Paddy Power, launched the equity raising on Thursday evening. Flutter raised 812.6m of gross proceeds by selling shares representing 5.5% of its share capital. The placing price of 10.10 a share was 4.7% less than the shares' closing price on 28 May.
 
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