London pre-open: Stocks seen lower as investors mull China Covid policy

The FTSE 100 was called to open 18 points lower at 7,316.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: “Despite optimism last week that the Covid measures could be wound down slowly to let people and the economy breathe, the Chinese officials reiterated that they will ‘unswervingly’ stick to the Covid zero approach. Therefore, expect last week’s gains in Chinese stocks to be given back.”

Investors will also be digesting the latest Chinese trade data, which showed that exports came in worse than expected in October, dragged down by a drop in exports to the EU and softening global demand.

The trade balance rose to $85.2bn from $84.7bn in September, versus consensus expectations of $96bn.

Exports rose 0.3% year-over-year in October, down from 5.7% growth a month earlier and well below consensus expectations of 4.5% growth. Meanwhile, imports rose 0.7% following a 0.3% jump in September. Economists had been expecting no growth.

Ozkardeskaya said: “The strict Covid curbs in China, combined to rising global inflation and tightening monetary conditions hit both global and domestic demand. A far lower-than-expected trade surplus confirmed how Xi Jinping’s stubborn zero Covid fight is hurting the country’s economy.”

In corporate news, chemicals company Croda International said that group finance director Jez Maiden will retire after eight years in the role.

Maiden will be succeeded by former Meggitt (LON:MGGT) chief financial officer Louisa Burdett on 13 March. Burdett served four years as Meggitt’s CFO before it was acquired by Parker-Hannifin in September.

Elsewhere, Energean said its Zeus-01 exploration well off the coast of Israel had made a commercial gas discovery of 13bn cubic metres of gas and that it was conducting post-well analysis of its find.

It added that an audit of its Athena discovery had upgraded reserves by 3 bcm to 14.75bcm after post-well studies of drilling data.