London open: Stocks nudge up as investors eye Xi-Trump meeting

At 0835 BST, the FTSE 100 was 0.1% firmer at 7,412.77, while the pound was up 0.1% against the dollar at 1.2684 and 0.1% lower versus the euro at 1.1135.

Trump said on the sidelines of the G20 summit that he expects talks to be "productive" when he meets Xi Jinping on Saturday. According to AFP, Trump said: "I think it will be productive…It will be a very exciting day."

Han Tan, market analyst at FXTM, said: "This weekend, markets will find out whether their hopes for a restoration in US-China trade talks will become reality, and whether the scope for further deterioration in bilateral relations would be significantly constrained. It remains to be seen whether the public displays of chest-thumping from both sides since May will eventually lead to handshakes and smiles on Saturday. Such a reconciliatory image out of the Trump-Xi meeting is expected to send relief signals coursing through the veins of the markets, potentially boosting global equities and emerging-market assets.

"Still, the prudent investor would be well aware that the road ahead isn’t all plain sailing, given the tremendous gulf that still remains between both governments, with tit-for-tat tariffs still in place. As long as the prospects of more trade tariffs loom large over the horizon, risk aversion should continue having a major say on market sentiment."

In equity markets, housebuilders were the standout gainers, with Berkeley Group, Taylor Wimpey, Persimmon and Barratt Developments all higher after Tory leadership frontrunner Boris Johnson pledged to slash stamp duty in the event of a no-deal Brexit budget.

Merlin Entertainments shares surged after it agreed to be taken private by investors including Lego's founding family and buyout firm Blackstone for almost £6bn in cash. The deal values the owner of Legoland resorts and Madame Tussauds' shares at 455p each - 15.2% more than their closing price on Thursday and a 36.8% premium to the value before one of Merlin's biggest investors called for a sale.

Woodford Patient Capital was also in the green as it said it plans to cut debt, is considering share buybacks and announced some board changes following talks with shareholders.

The company, whose shares have been under pressure since the suspension of Neil Woodford's flagship Equity Income Fund, said it plans to cut gearing to below 10% from 16.8% within six months, and to be "generally operating ungeared" within 12 months. It also said it would undertake share buybacks if its shares continue to trade at a "sustained and material" discount to net asset value.

Luxury fashion brand Burberry rallied as Goldman Sachs upped its stance on the stock to 'neutral' from 'sell'.

On the downside, Paypoint lost ground after saying it had been unable to agree appropriate renewal terms for its multi-year contract with British Gas and will cease to work with the company after 31 December 2019.

Market Movers

FTSE 100 (UKX) 7,412.77 0.14%
FTSE 250 (MCX) 19,402.24 0.45%
techMARK (TASX) 3,635.50 0.02%

FTSE 100 - Risers

Berkeley Group Holdings (The) (BKG) 3,679.00p 2.74%
Burberry Group (BRBY) 1,833.00p 2.46%
Taylor Wimpey (TW.) 159.00p 2.28%
Persimmon (PSN) 1,978.00p 2.09%
Ocado Group (OCDO) 1,187.00p 1.84%
Carnival (CCL) 3,495.00p 1.72%
Barratt Developments (BDEV) 573.40p 1.63%
Kingfisher (KGF) 217.20p 1.35%
Standard Life Aberdeen (SLA) 292.30p 1.32%
Just Eat (JE.) 630.80p 1.32%

FTSE 100 - Fallers

Evraz (EVR) 638.40p -2.62%
BT Group (BT.A) 195.34p -1.71%
United Utilities Group (UU.) 783.00p -0.84%
Severn Trent (SVT) 2,038.00p -0.49%
Centrica (CNA) 85.96p -0.42%
BP (BP.) 548.70p -0.36%
Royal Dutch Shell 'B' (RDSB) 2,586.00p -0.33%
BHP Group (BHP) 2,003.50p -0.32%
Standard Chartered (STAN) 708.60p -0.31%
Rolls-Royce Holdings (RR.) 841.60p -0.31%

FTSE 250 - Risers

Merlin Entertainments (MERL) 450.50p 14.05%
Sirius Minerals (SXX) 15.09p 3.14%
Woodford Patient Capital Trust (WPCT) 59.29p 3.11%
Metro Bank (MTRO) 528.00p 2.92%
Acacia Mining (ACA) 179.70p 2.74%
Brewin Dolphin Holdings (BRW) 312.60p 2.69%
McCarthy & Stone (MCS) 137.49p 2.22%
William Hill (WMH) 156.40p 2.15%
Restaurant Group (RTN) 129.20p 2.13%
Bellway (BWY) 2,764.00p 1.95%

FTSE 250 - Fallers

PayPoint (PAY) 979.00p -4.21%
Go-Ahead Group (GOG) 1,909.00p -2.35%
Kainos Group (KNOS) 640.27p -1.80%
Polypipe Group (PLP) 437.20p -1.58%
Diploma (DPLM) 1,538.00p -1.09%
Pennon Group (PNN) 735.60p -0.97%
John Laing Group (JLG) 388.50p -0.94%
Petrofac Ltd. (PFC) 444.50p -0.94%
Premier Oil (PMO) 78.25p -0.89%
QinetiQ Group (QQ.) 279.80p -0.85%