London pre-open: Stocks seen up amid optimism over Sino-US trade relations

The FTSE 100 was called to open 28 points higher at 7,525.

CMC Markets analyst David Madden said: "The two largest economies in the world decided not to impose extra tariffs on each other, and that was viewed as a win for the bulls. The Trump administration softened its stance in relation to the ban it imposed on US firms from doing business with Huawei, on the condition it doesn’t put national security at risk. The concession from Donald Trump shows he is willing to be flexible, but it is worth noting that many US tech giants were calling for a loosening of the restrictions.

"To give some concessions to the US, Xi Jinping promised to ramp up China’s purchase of agricultural machinery from the US. Mr Trump wants to rebalance the trading relationship with China, so this is a step in the right direction, but the US still has major concerns about the protection of intellectual property, so the wider trade dispute is likely to drag on for some time.

"Equity markets in Asia broadly traded higher overnight as the feel good factor post the Trump-Xi Jinping meeting is still doing the rounds. Mr Trump claimed the latest US-China trade talks have ‘started already’."

On home shores, investors will be digesting the latest survey from Nationwide, which showed that house prices were pretty much flat in June, up just 0.1% on the month. This was an improvement on the 0.2% decline seen in May but a touch below consensus forecasts of 0.2% growth.

On the year, house price growth eased to 0.5% in June from 0.6% in May, in line with consensus.

Pantheon Macroeconomics said: "Prices likely will continue to flatline in Q3, given that Rightmove reported that asking prices were unchanged year-over-year in June. Nonetheless, households’ disposable incomes are rising at a solid pace this year, largely thanks to the recent pick-up in wage growth.

"In addition, the recent fall in banks' wholesale funding costs- for instance, the 5-year LIBOR swap rate has fallen by 30bp over the last two months- should at least partially feed through to mortgage rates in Q3, improving affordability further.

"Meanwhile, the stability of mortgage lending this year has demonstrated that households are fairly relaxed about the possibility of a no-deal Brexit, even if in reality it would be very damaging for house prices. So provided a no-deal Brexit is avoided, we still expect year-over-year growth in house prices to recover to about 1.5% by the end of this year."

In corporate news, advertising giant WPP confirmed late on Monday that it was in exclusive discussions with private equity firm Bain Capital about the sale of its majority stake in market research business Kantar, in a deal that would value the business at $4bn.

WPP, which had already announced that it was looking to sell the stake, said there is no certainty the discussions will lead to a deal.

Second quarter revenue at online trading platform Plus500 rose to $94m after a first quarter that was hit by lower volatility and EU rules on leveraged betting.

The company said it continues to perform in line with current expectations, adding there were signs of reduced levels of marketing across its peer group, which in part led to a rise in customer numbers at Plus500 and lower cost of acquisition.

Funding Circle slashed full-year revenue growth expectations from 40% to approximately 20% as it warned that an increasingly uncertain economic outlook has reduced demand for loans, while the lender has also tightened its loans policy when it comes to higher risk band businesses.

While this will affect overall origination volumes, the company said it aims to protect net returns for investors on its platform.

Wizz Air saw its network continue to grow in June, with its total capacity for the month rising 17% year-on-year to 3.798 million seats, while the number of passengers carried was ahead 19.1% year-on-year at 3.609 million.

The low-cost carrier said that made for a 1.7 percentage point improvement in its load factor to 95%. Its fleet expanded to 114 aircraft after the delivery of a new Airbus A321ceo, while the airline also signed a memorandum of understanding with Airbus for the purchase of 20 Airbus A321neo XLR during the month.