The FTSE 100 is expected to get off to a stumbling start on Tuesday, following a rout at the end of last week and a long bank holiday weekend in England.
London stocks are predicted to dip around seven points to 7,086.2, according to spread-betters on the IG platform.
Overnight, Wall Street had rebounded on the back of some conciliatory words from President Trump at the G7 summit in Paris.
The Dow Jones Industrial Average closed almost 270 points or 1.0% higher at 25,898 on Monday, having tumbled more than 600 points on Friday. The broader S&P 500 index was up 1.1%, while the tech-laden Nasdaq Composite fizzed up 1.3%.
Following Friday’s aggressive volley of tweets, President Trump said Chinese officials had contacted their US trade counterparts overnight and offered to return to the negotiating table.
China’s vice premier Liu He, meanwhile, said the country was willing to resolve the trade dispute through “calm” negotiations and would resist escalating the conflict.
Scepticism remains
As gold prices touched new six-year highs and US treasury yields continued to slide, analysts at Rabobank summed up the sceptical view of the US-China trade situation.
“Is China really going to sign up willingly to a new US order that doesn’t allow for Made in China 2025 or the South China Sea, or regional primacy?” they pondered rhetorically.
“Or Iran (whose proxies are clashing with Israel in Lebanon and Iraq and with Saudi Arabia in Yemen)? Or the EU, which likes things just as they are, danke schöne?
“Clearly not. And why should they when we are 15 months away from a US election which could, in their imaginations, make this all go away with a new president?”
Among the thin sprinkling of corporate news on Tuesday, there are first-half results due from Bunzl PLC (LON:BNZL), though they are unlikely to contain too many surprises given that the company has already given investors a taste of what’s to come: modest growth.
A trading update in June showed underlying organic revenue growth slowed to just 1% in the half-year, from 1.5% in the first quarter, as slower global growth continued to drag on the logistics giant.
For the full calendar year, the board said its expectations “remain unchanged with overall trading consistent with the slowing underlying revenue growth indicated at the time of the first quarter trading statement”, with annual profits expected around £562mln.
Tuesday August 27:
Interims: PureTech PLC (LON:PRTC), Jadestone Energy PLC (LON:JSE), Bank of Cyprus Holdings PLC (LON:BOCH), Bunzl PLC (LON:BNZL)
Economic data: US house price index, US consumer confidence