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London pre-open: Stocks seen flat with geopolitics, US earnings in focus
London stocks were set for a muted open on Friday as investors kept an eye on the geopolitical situation, with the latest Chinese trade data in focus and US bank earnings to look forward to.
The FTSE 100 was called to open flat at 7,258.
Data out of China earlier showed a surprise monthly trade deficit in March for the first time in 13 months. China's trade balance swung to a deficit of $4.98bn from a surplus of $33.7bn the month before, versus expectations for a surplus of $19.6bn.
London Capital Group analyst Jasper Lawler said: "A sharp drop in exports is of some concern for the country's future path of economic growth. One data point does not make a trend, and this drop is likely a combination of exporters front-loading before possible tariffs and simply a pullback from a strong first two month of the year.
"The deficit might have been welcomed by US President Trump, but China's trade surplus with the US rose significantly in the first quarter. If investors were looking for empirical evidence to tempt the White House to back off from a trade war, it won't be found here."
Meanwhile, geopolitical tensions were set to keep simmering after UK Prime Minister Theresa May and US President Trump agreed during a late-night phone conversation that Syria's suspected use of chemical weapons should not go unchallenged.
Downing Street said Cabinet ministers had agreed "on the need to take action" to "deter further use of chemical weapons" after concluding that it was "highly likely" the Assad regime was behind the chemical attack.
Transport Minister Jo Johnson later said there had been no decision to take military action at this point.
Across the pond later in the day, updates from JPMorgan Chase, Wells Fargo and Citigroup will kick off the US earnings season.
In UK corporate news, London Stock Exchange has appointed Goldman Sachs veteran David Schwimmer as its new chief executive.
Schwimmer, who succeeds Xavier Rolet, will join the company on 1 August and will be a member of the board of directors. Meanwhile, interim chief executive and group chief financial officer, David Warren, will continue as group CFO and a member of the board.
Elsewhere, Sage Group said it was cutting its full-year organic revenue growth guidance, reflecting inconsistent operational execution.
FY18 guidance was revised from around 8% organic revenue growth and around 27.5% organic operating margin to around 7% organic revenue growth and around 27.5% organic operating margin.