London pre-open: Stocks seen higher amid trade hopes

London stocks were set for a firmer open on Wednesday, taking their cue from upbeat sessions in the US and Asia as investors grew hopeful of a trade truce extension between the US and China.

The FTSE 100 was called to open 36 points higher at 7,169.

London Capital Group analyst Jasper Lawler said: "Trump saying that there could be some leeway with the March 1st trade truce deadline if the two sides were close to a deal was music to the ears of the market.

"Whilst there have been positive reports regarding the trade talks investors were getting nervous of the nearing deadline and no solid evidence of progress. Negative sentiment is unwinding, and investors are showing that they are prepared to put risk back on the table. For sentiment to remain positive we will need to see evidence of a deal in March. However, for now markets are willing to let this pass."

Meanwhile, as far as the deal to avert another government shutdown is concerned, Lawler said: "With this headwind moving quickly into the rear-view mirror investors are moving their money out of safe havens and back into riskier assets."

On the data front, the retail price index, producer price index and consumer price index are all due at 0930 GMT.

In corporate news, Smurfit Kappa saw growth slow in the final few months of last year but the Irish packaging group still delivered strong growth in profits and cash flow.

The FTSE 100 group's calendar year revenue of €8.95bn was up 4% on the previous year, with profit before tax and exceptional items up 56% to €938m. With free cash flow swelling 61% to €494m, the dividend was lifted 12% to 72.2 cents a share.

InterContinental Hotels Group has announced the acquisition of Six Senses Hotels Resorts and Spas from Pegasus Capital Advisors for $300m in cash.

The acquisition includes all of Six Senses' brands and operating companies but does not include any real estate assets. The business manages 16 hotels and resorts and there are a further 18 management contracts signed into its development pipeline.

Dunelm reported “strong” like-for-like revenue growth in its interim results on Wednesday, with underlying revenue growing 6.9% to £473.9m, and increases seen both in store of 3.8%, and online of 35.8%.

The home furnishings retailer said its gross margin improved by 170 basis points year-on-year, as a result of improved sourcing, foreign exchange benefits and the removal of its less profitable Worldstores lines. Profit before tax was £70.0m for the 26-week period to 29 December - up 16.7% year-on-year.