London pre-open: Stocks seen higher as investors welcome Sino-US trade truce
London stocks were set for a positive open on Monday, taking their cue from an upbeat Asian session as investors welcomed a temporary trace truce between the US and China.
The FTSE 100 was called to open 107 points higher at 7,087.
At the G20 summit over the weekend, US President Trump and China's Xi Jinping said they would hold off on any further tariffs for the time being as they attempt to settle their differences through talks.
The US will hold fire on raising tariffs on $200bn worth of Chinese goods from 10% to 25% on 1 January. Meanwhile, China said it was willing to buy a "very substantial" amount of agriculture, energy and other goods from the US to reduce the trade imbalance.
Hussein Sayed, chief market strategist at FXTM, said: "What was delivered over the dinner was not a breakthrough, neither a long-term solution for the ongoing trade war between the largest two economies, but a 90-day window to improve relations. Introduction of new tariffs are now shelved, and trade talks will intensify over the next three months.
"This outcome seems to be an optimistic one from the two leaders and more than what was priced into markets beforehand, meaning that this is enough to boost sentiment and risk-on trade."
Back on home turf, Labour warned that Prime Minister Theresa May was facing a constitutional crisis if she does not publish the full legal advice on her Brexit deal. Opposition parties are threatening to launch contempt of parliament proceedings against Downing Street over the issue, with MPs voting last month to ensure the government would be required to lay before parliament "any legal advice in full".
On the UK data front, Markit's manufacturing PMI for November is at 0930 GMT.
In corporate news, Spirax-Sarco Engineering said it had sold its German HygroMatik unit to Carel Industries for €59m (£52.m).
The profit on disposal, after relevant fees, will be excluded from adjusted operating profit but included in reported statutory profit in the group's financial results for 2018, Spirax said.
One of the two US private equity giants in buyout talks with RPC Group has walked away, but negotiations continue with the other.
RPC said it has ended discussions with Bain Capital but that the deadline for Apollo Global Management to make an offer has been pushed back to 21 December as talks continue.
AstraZeneca has completed an agreement to divest the prescription medicine rights to Nexium (esomeprazole) in Europe, as well as the global rights - excluding the US and Japan - to Vimovo (naproxen/esomeprazole), to Grunenthal.
The drugmaker said that under the terms of the agreement, it received payments of $700m for Nexium and $115m for Vimovo from Grünenthal. It said it would continue to commercialise Nexium in all markets outside Europe, where it retained the rights, but it would not retain any ownership rights to Vimovo globally.