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10 Mar 2021 | 07:35

London pre-open: Stocks to fall as investors mull China inflation data

(Sharecast News) - London stocks were set to fall at the open on Wednesday amid lingering concerns about inflation, as investors digest the latest reading out of China. The FTSE 100 was called to open 42 point lowers at 6,688.

CMC Markets analyst David madden said: "Overnight, China's PPI rate swung from 0.3% in January to 1.7% in February, its highest reading since November 2018. The surge in prices at the factory level adds weight to the argument that higher inflation is in the pipeline as increases in costs at the factory level are likely to be passed on to consumers.

"The CPI rate in China rose from -0.3% to -0.2%. Even though consumer demand appears to still be weak, it at least is improving. The PPI report is likely to resonate with traders in the West as there have been worries about higher prices recently.

"Stocks in mainland China have rebounded from yesterday's declines, while the market in Hong Kong is essentially flat as the previous intra-day gains have been handed back. European markets are set for a negative start."

In corporate news, Just Eat Takeaway said it would keep up its investment drive as the food delivery company reported surging sales and a wider annual loss.

The FTSE 100 group reported a €151m (£129m) net loss for the year to the end of December compared with a €115m loss a year earlier as revenue rose 54% to €2.4bn. Adjusted earnings before interest, tax, depreciation and amortisation rose 18% to €256m.

Just Eat said it would prioritise market share over earnings in 2021 and that it expected order growth to accelerate.

Legal & General reported flat annual operating profits as it set aside an extra £110m in Covid-19 insurance claims due to the emergence of new virus strains.

Operating profit fell slightly to £2.21bn from £2.28bn with three of its five divisions delivering growth. Pre-tax profit fell to £1.78bn from £2.11bn. The company's solvency ratio fell came in at 177% compared with 184% a year earlier. L&G estimated a ratio of 192% at March 5.

Record demand for logistics space saw earnings per share at Tritax Big Box improve by 8% to 7.17p in 2020.

The FTSE 250 real estate investment trust said that was driven by development completions, active asset management and development management income, net of disposals. Its board declared a fourth quarter dividend of 1.7125p, resulting in total 2020 dividends of 6.40p per share, representing a pay-out ratio of 90% but slipping from 6.85p in 2019.

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