London pre-open: Stocks to rise as Trump grants temporary reprieve from Huawei ban
London stocks were set to rise at the open on Tuesday following losses in the previous session, after US President Trump granted a temporary reprieve from the Huawei ban.
The FTSE 100 was called to open 21 points higher at 7,331.
London Capital Group analyst Jasper Lawler said: "In an attempt to control the damage done to US stocks, Trump overnight announced that the US Commerce Department will allow Huawei to purchase American made goods for the next three months. This is an attempt to maintain existing networks and to keep updates to existing Huawei handsets. The grace period will allow US firms the space to determine longer term measures that currently rely on Huawei equipment for critical services.
"This latest move by Trump shows just how haphazard his policies are and also how pervasive Huawei goods and technology are. Yesterday was a big reality check for Trump and shows the incomplete information available for his decision. This won’t be a one-day event. Huawei is entrenched on so many parts of the tech sector, this could take days or weeks to untangle."
On home shores, the pound was hovering above $1.27 but is likely to come under pressure later in the day, with Prime Minister May expected to face a cabinet showdown as she attempts to get backing for her Brexit agreement.
"Theresa May’s changes to the deal centre around a close customs relationship to the European Union and are expected to infuriate the pro-Brexit ministers looking to succeed the PM," Lawler said.
On the data front, the CBI industrial trends survey is at 1100 BST.
In corporate news, construction group Galliford Try said it expected full year results to be in line with its own compiled forecasts as it added that target construction revenues would fall to £1.3bn.
Galliford's forecasts for profit before tax after taking into account exceptional items for the year to June 30 is £112.7m - £123.3m based on forecasts at May 20.
The restructured construction business was expected to generate annualised cost savings of up to £15m from 2021, accelerating progress towards Galliford's target operating margins of 2% by 2021.
Tesco's banking arm has quit the new mortgage market and is trying to sell its £3.7bn of existing mortgages, blaming difficult market conditions that make profitable business hard.
The supermarket group's bank has sold mortgages since 2012 and has more than 23,000 customers.
Severn Trent reported a 4.2% rise in group turnover in its annual results to £1.767bn, with group underlying profit before interest and tax 6.3% higher in the year ended 31 March to £574m, the company having absorbed all hot weather costs.
The water utility firm said that during the year it managed to maintain the lowest bills in England for a decade, which was set to continue to at least 2025.