London pre-open: Stocks to rise as US and Mexico reach new trade deal
London stocks were set for a positive open on Tuesday, tracking gains in the US, where the S&P 500 and the Nasdaq hit record highs after the US and Mexico reached a new trade deal.
The FTSE 100 was called to open 48 points higher at 7,625.
US President Trump announced on Monday that the US and Mexico had agreed the terms of a new trade deal which he hoped would replace the North American Free Trade Agreement (NAFTA).
CMC Markets analyst David Madden said: "The trade deal needs to be approved by Congress, but investors are clearly confident of it getting approved. Trade tensions have been hanging over equity markets, and this is certainly a step in the right direction. It is believed that Canada will be on the agenda next, and traders will be paying close attention to those developments."
Meanwhile, investors will continue to keep an eye on US-China trade relations after last week's talks between the two failed to yield a breakthrough.
"It would appear that the trade spat will rumble on and there is chatter in the markets that the US is eyeing up another round of tariffs on Chinese goods, but this time it could be up to $200bn worth of Chinese imports," said Madden. "The US department of agriculture has plans to financially support farmers who have been targeted by Beijing’s tariffs, and this initiative suggests how determined Washington DC is to maintain a hard-line."
In UK corporate news, Bunzl reported a 4% increase in first-half profit as the distribution and outsourcing group’s growth in Europe more than made up for the weaker dollar's impact on its business in North America.
Adjusted pre-tax profit for the six months to the end of June rose to £257.9m from £248.3m as revenue increased 5% to £4.3bn.
Global plastic products design and engineering company RPC Group has reached a binding agreement with Graphic Packaging International for the sale of the foodservice business of Letica Corporation for a pre-tax cash free, debt free consideration of $95m.
The FTSE 250 firm said the completion of the transaction remained subject to regulatory approval in the United States.
Private healthcare operator NMC Health was forced to respond to press speculation on Tuesday, saying it had received questions on the back of various news articles regarding the acquisition of assets in India.
The company denied the news and reaffirmed its current focus on the Gulf Cooperation Council market for capital deployment. It said its fertility business and operations and management (O&M) vertical remained the only exceptions to the above, and maintained a wider geographic focus.