London pre-open: Stocks seen higher on positive US cues but trade fears persist
London stocks were set for a firmer open on Tuesday following a positive close in the US, although worries about escalating trade tensions were likely to continue to play on investors' minds.
The FTSE 100 was called to open 15 points higher at 7,562.
London Capital Group analyst Jasper Lawler said: "Chinese markets were in for another rough session on Tuesday down a further 1%, despite support from Chinese state media. With the start of the US imposed tariffs now just days away and China expected to retaliate, alarm bells are starting to ring, sending the Shanghai bourse plunging to a two and a half year low on Monday, whilst the yuan also fell.
"Trade war fears are sending traders out of riskier assets, compounding the problem for China as an emerging market. The timing of the tariffs comes just as the Chinese economy is taking its foot off the pedal; quite the opposite to the US, where the economy appears to be going at full throttle."
On the data front, the UK construction PMI at 0930 BST is expected to be unchanged in June at 52.5.
Lawler said a surprise to the upside could lift the construction sector but the pound might be a tougher nut to crack.
"As we saw from the previous session, where even a better than expected manufacturing PMI was insufficient to boost sterling in the face of Brexit concerns and trade war fears. The pound hit a peak of $1.3150, however it could still struggle to push much beyond here until after the heavier hitting service sector PMI later on Wednesday."
In corporate news, McBride has warned annual profit will be lower than forecast after disappointing sales in the last two months of its financial year.
The maker of private label household products said sales in May and June were weaker than expected, taking annual pre-tax profit “below the lower end of analyst expectations”.
Smurfit Kappa Group has completed the acquisition of Netherlands-based paper and recycling business Reparenco for €460m.
The FTSE 100 group sees a "strong strategic fit" for its existing European businesses, which is expected to deliver more than €30m of synergies.
Entertainment One has completed the purchase of the remaining stake in feature film production and global sales company Sierra Pictures, it announced on Tuesday, which resulted in full ongoing ownership by the group.
The company made an initial investment in 2015. It aid Sierra Pictures enhanced its capabilities in producing and acquiring premium films and cultivating successful relationships with industry talent and creatives, further increasing direct involvement and ownership in content.