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(Alliance News) - Stocks are set for a marginally lower open on Friday in London, as the two-pronged threat of the US-China trade war and Brexit continue to keep investors guessing.
IG futures indicate the FTSE 100 index is to open 2.5 points lower at 7,325.75. The blue-chip index closed up 67.51 points, or 0.9%, at 7,328.25 on Thursday.
US Vice President Mike Pence on Thursday criticised China for failing to live up to promises made on reining in intellectual property theft as well as raised other common US complaints about human rights violations in the country.
China's government continues to "aid and abet" the theft of intellectual property, claimed Pence, speaking in Washington.
The Chinese Communist Party also continues to resist change, especially in its treatment of religious minorities and its stance on pro-democracy protests in Hong Kong, in ways that harm the potential for building a foundation for better ties with the US, he said.
But Pence said that despite China's "aggressive and destabilizing" behaviour in the last year, the US does not seek confrontation.
"On the US-China trade front, Mike Pence's criticism of China over the human rights in Hong Kong protests tempered the optimism regarding the possibility of a partial trade deal next month," said Ipek Ozkardeskaya at London Capital Group.
"Investors remain hopeful that despite political controversies, the two countries could find at least a partial agreement at next month's APEC meeting in Chile."
In the US on Thursday Wall Street ended mixed, with the Dow Jones Industrial Average closing down 0.1%, the S&P 500 0.2% higher, and the Nasdaq Composite 0.8% higher.
The Japanese Nikkei 225 index ended up 0.2%. In China, the Shanghai Composite is up 0.4%, while the Hang Seng index in Hong Kong is 0.3% lower.
EU leaders are expected to announce a decision over a Brexit delay, in a move that could have a bearing on whether Boris Johnson gets his pre-Christmas general election.
The prime minister challenged MPs to back his call for a December 12 vote in return for more time to scrutinise his Brexit deal as he tried to break the deadlock.
Johnson will need Labour votes if he is to win the attempt on Monday, with a "super majority" of two-thirds of MPs required to get an election under the Fixed-Term Parliaments Act.
Jeremy Corbyn said his decision would come after inspecting the terms of any extension to Article 50 granted by Brussels, which he was expecting to come on Friday.
The pound was quoted at USD1.2856 early Friday, firm from USD1.2828 late Thursday.
"By agreeing on a Brexit deal with the EU and passing his deal through Parliament, Johnson has certainly secured an easy win for the next general election. But to do so, he needs that three-month extension in the Brexit deadline. Europeans will decide today whether to grant the UK a fresh extension, and if yes, by how much," Ozkardeskaya continued.
"The pound will likely further suffer from an early election dispute."
In UK corporate news, lender Barclays reported a GBP4.9 billion pretax profit for the third quarter of 2019, excluding litigation and conduct charges, a 7.5% drop year-on-year. Including litigation and conduct charges in the recent period and its comparison period, profit rose 6.5% to GBP3.3 billion.
Barclays has included a provision of GBP1.4 billion for PPI in its third-quarter accounts, with the deadline for claims falling within the quarter.
Barclays's return on tangible equity was 9.7% adjusted, compared to 11.1% the year before. The cost to income ratio was 62%, flat on the year prior, with jaws positive. The common equity tier 1 ratio was 13.4%, compared to 13.2% at the end of 2018.
Chief Executive Jes Staley said it was a "consistent and resilient" set of results, with the UK business doing well. However, he did say the outlook is "unquestionably" more challenging given the interest rate environment and UK economic uncertainty.
Advertising agency WPP reported a 5.2% rise in revenue for the third quarter of 2019 to GBP3.29 billion, with the like-for-like figure rising 1.5%. Minus pass-through costs, revenue rose 3.7% and 0.5% like-for-like.
WPP reported an improvement in conditions in major markets and sectors in the quarter, with a "significant" improvement in North America and China.
By business, the Global Integrated Agencies unit showed a strong improvement, WPP said, but Public Relations and Specialist Agencies did less well. Guidance for 2019 is unchanged.
Miner Glencore reported a 4% yearly decline in third-quarter copper production, but cobalt rose 21%, zinc by 3%, and lead by 12%. Elsewhere, oil production climbed 8%, coal by 8%, while nickel fell 2% and gold by 20%.
Glencore said copper output was down due to a revised mining plan at Mutanda in the Democratic Republic of the Congo, as well as a smelter shutdown at Mopani in Zambia and the disposal and depletion of South American assets.
Cobalt was helped by a ramp-up of production from the Katanga mine in the DRC.
In the FTSE 250, Synthomer said growing weakness in the global economy is creating a "more challenging" backdrop for the chemicals market.
In the Performance Elastomers unit, there has been continued weakness in the third quarter of 2019 in Europe, and Synthomer has now started a review, saying it will update on "asset re-purposing and cost base" in March next year.
The company expects slower trading to continue for the rest of 2019 and into 2020. If current weakness continues as is, Synthomer said, 2019 underlying pretax profit will be 10% below 2018 and 10% off market consensus of GBP135.3 million.
Plastic and fibre products firm Essentra said third-quarter underlying revenue is broadly flat year-on-year, despite Brexit problems and a more difficult environment. On a like-for-like basis, it has fallen 2.9%.
The Filters business suffered a fall in revenue, Essentra said, but it expects this to reverse in the last quarter and said the unit has now secured a first "significant" outsourcing deal.
Insurer Hastings Group reported a 5% rise in third-quarter live customer policies to 2.8 million, with retention "strong". Gross written premiums were up 2% to GBP753.1 million for the nine months to September.
However, Hastings's net revenue for the nine-month period dipped 2% to GBP563.8 million due to lower earning premiums and lower reinsurance commissions.
Hastings said the 2019 loss ratio will be dependent on claims in the fourth quarter, and it could move from the top of its target range to slightly above should "elevated" claims continue.
Telecommunications firm Airtel Africa reported a 10% rise in customer numbers for the six months to September, reaching 104 million, with revenue up 8.4% to USD1.64 billion.
Pretax profit for the quarter more than doubled to USD316 million, and Airtel Africa, which listed in June, has declared a 3 US cent dividend for the half.
Chief Executive Raghunath Mandava said it was a strong period for the company, crossing the 100 million customer mark. The outlook remains positive, he added.
The economic events calendar on Friday has producer prices from France at 0745 BST, as well as the final reading of the University of Michigan's consumer confidence survey in the US at 1500 BST.
By George Collard; georgecollard@alliancenews.com
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