London pre-open: Stocks seen up on continued US-Mexico optimism

London stocks were set to rise at the open on Wednesday amid ongoing optimism about the US-Mexico trade deal.

The FTSE 100 was called to open 15 points higher at 7,640.

CMC Markets analyst David Madden said: "US stocks enjoyed a positive session yesterday as traders remained elated by the US- Mexico trade deal, and there is talk of Canada following suit, and that added to the bullish sentiment. There is speculation that a Canadian deal could be achieved in the next few days. There is a growing sense that trading relationships in North American are on the way up and this helped the Nasdaq 100 and S&P 500 reach new record-highs yesterday.

"The trading relationship with China is still a work in progress. Steve Mnuchin, the US treasury secretary claims it goes far beyond tariffs. Mr Mnuchin would like to see business in China be opened up to foreigners, and have tighter protection for intellectual property. Given that China likes to keep it a bit of a closed when it comes to business, it is likely that the US-China trade spat will drag on."

In corporate news, Diploma’s chief executive Richard Ingram has left the technical equipment supplier after less than four months in the job.

Chairman John Nicholas, will run the FTSE 250 company until a replacement is found. Diploma said it was trading solidly and on track to meet expectations for annual profit.

Oilfield services provider Petrofac said it swung to a net loss in the first half as it announced an engineering, procurement and construction contract worth $600m with Algeria’s Sonatrach.

In the six months to 30 June, the company made a net loss of $17m versus a net profit of $70m in the same period a year ago, as it took a hit from the sale of some assets and other exceptional items.

Listed infrastructure investment firm HICL Infrastructure Company has entered into an agreement to sell its 9.7% interest in the AquaSure Desalination PPP Project, it announced on Wednesday. The FTSE 250 company said the value of its investment in AquaSure was increased by approximately 10% in September last year, in line with a market transaction earlier in 2017.

It said the disposal price agreed would generate a premium for the group of about 7% over the AUD 150m valuation of the investment at 31 March, with the transaction expected to complete during the fourth quarter of this year, subject to third-party consents.