(Alliance News) - Stock prices in London are seen opening in the red on Monday after a decline on Wall Street on Friday, as investors remained cautious amid fears of a fresh escalation in the US-China trade war and continue political friction in the US and UK.
In early UK company news, Neil Woodford apologised to shareholders of Woodford Patient Capital Trust for what was the most challenging period in the company's history, oil major Royal Dutch Shell provided a production update, and the UK competition regulator said it wouldn't refer DS Smith's unit sale for Phase 2 review.
IG futures indicate the FTSE 100 index is to open down 12.81 points at 7,413.40. London's blue-chip index rose 75.13 points, or 1.0% at 7,426.21 on Friday.
The UK Competition & Markets Authority said it has accepted undertakings offered by packaging firm DS Smith and Liqui-Box and as a result won't refer the planned sale of a DS Smith business to Liqui-Box for Phase 2 review.
In August, the UK monopoly regulator had said it was considering proposals made by Liqui-Box related to its acquisition of the flexible plastics packaging arm of DS Smith, after the watchdog had raised competition concerns relating to the deal.
Royal Dutch Shell said for that for the third quarter it expects to deliver a "strong trading and optimisation performance".
In its Integrated Gas unit, Shell said production is expected to be in a range between 930,000 and 960,000 barrels of oil equivalent per day. In the Upstream oil division, production is expected to be between 2.6 million and 2.65 million barrels of oil per day.
In the Downstream arm, oil products sales volumes are expected to be between 6.7 million and 7.3 million barrels per day.
Shell will report third-quarter results on October 31.
Ferrexpo said it was aware of allegations made on social media that Chief Executive Kostyantin Zhevago has been served with a notice of suspicion regarding an investigation in Ukraine relating to one of the businesses he owned until 2015.
The iron pellet producer said Zhevago has informed the board he has not received a notice of suspicion in accordance with Ukrainian law. Additionally, the company said, the public spreading of "such untrue information" in the media violates his rights as a citizen of Ukraine and causes direct reputational and economic damage to the businesses in which Zhevago is a shareholder.
Zhevago strongly denies any allegations of wrongdoing, Ferrexpo added.
Woodford Patient Capital Trust said recent months have been "the most challenging period for the company since it floated in 2015".
In June, the trust's fund manager, Neil Woodford, took the decision to suspend withdrawals from his separate open-ended equity income fund due to "an increased level of redemptions", with the that fund needing time to "reposition" its portfolio invested in unquoted and less liquid stocks into more liquid investments.
On Monday, Woodford Patient Capital said net asset value on June 30, was GBP654.2 million, down 19% from GBP807.2 million in December.
In addition, the trust's NAV per share on June 30, was 72.00 pence, down 26% from 97.61p on December 31.
"Shareholders have endured an extremely disappointing six-month period, for which I am very sorry. While shareholders can be forgiven for thinking there are no positives, I continue to believe that the majority of the businesses we have invested in are making good progress, in line with our pre-agreed milestones. This is not to gloss over the setbacks which the portfolio has suffered since WPCT was launched in 2015, nor the significant downward pressure both the NAV and share price have endured since the suspension of WEIF on 3 June 2019," Neil Woodford said.
In New York on Friday, the Dow Jones Industrial Average closed down 0.3%, S&P 500 down 0.5% and Nasdaq Composite down 1.1%.
Stocks on Wall Street were hit by multiple US media reports saying President Donald Trump's administration was considering the possibility of delisting Chinese companies from US stock exchanges.
London Capital's Ipek Ozkardeskaya said: "Bloomberg reported that 'Trump administration officials are discussing ways to limit US investors' portfolio flows into China' either by delisting the companies such as Alibaba, or by limiting the US exposure to the Chinese market via government pension funds. Such move would not only have a tremendous impact on billions worth of investment, but it could also raise the risk of retaliation from China, which has recently removed the quotas for foreign investors in an effort to open its economy."
The Japanese Nikkei 225 index closed down 0.6%. In China, the Shanghai Composite is flat, while the Hang Seng index in Hong Kong is up 0.7%.
Financial markets in China will be closed over the coming week as the country celebrates National Day. The seven-day holiday which starts on Tuesday and ends on October 7, is called Golden Week.
Chinese manufacturers saw a modest improvement in conditions in September, with production and total new orders expanding. The seasonally adjusted purchasing managers' index rose to 51.5 in September from 50.4 in August. Despite the "modest" improvement, it still marks the highest reading since February 2018, according to Caixin data, released on Monday.
Any reading above 50 represents expansion as opposed to contraction in the sector.
The September growth was driven by a faster rise in overall new work compared to August, with new orders rising at its quickest level since March 2018. New orders were being driven by "firmer" domestic demand.
The pound was quoted at USD1.2297 early Monday, lower than USD1.2310 at the London equities close on Friday.
The economic calendar on Monday has Germany unemployment figures at 0855 BST and inflation data at 1300 BST. There is also UK GDP readings at 0930 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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