(Alliance News) - Stock prices in London were set to open marginally lower on Monday, with investors unmoved by the latest hints US and China trade reconciliation, and amid uncertainty about US President Donald Trump's policy on auto-part imports from the European Union.
IG futures indicate the FTSE 100 index is to open 3.0 points lower at 7,300.3. The blue-chip index closed up 10.18 points, or 0.1%, on Friday at 7,302.94, ending the week down 0.8%.
"European stocks are expected to kick off a new week a little flat on Monday, with more talks between the US and China failing to excite investors in the way they have been recently," OANDA market analyst Craig Erlam said.
Top Chinese and US trade negotiators held "constructive" discussions over the phone on a preliminary trade deal between the two countries, China's commerce ministry announced in a statement on Sunday.
The long-running trade war between Washington and Beijing has weighed on the global economy and spooked markets, with the two sides imposing punitive tariffs on hundreds of billions of dollars in two-way trade.
US President Trump announced a "phase one" trade deal last month which has yet to be signed.
Vice Premier Liu He spoke with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Saturday, and had "constructive discussion on each side's core concerns regarding the phase-one agreement", the Chinese commerce ministry said.
The two sides will "continue to maintain close communication", it added, without providing further details.
The Japanese Nikkei 225 index closed 0.5% higher on Monday. In China, the Shanghai Composite ended up 0.6%, while the Hang Seng index in Hong Kong is up 1.3%.
In the US on Friday, stocks ended in the green, the Dow Jones Industrial Average and S&P 500 both 0.8% higher and the Nasdaq Composite up 0.7%.
Last week, a combative US president hit out at the trading bloc, labelling the European Union's barriers "very, very difficult".
According to AFP, the delay on a decision on whether to slap tariffs on auto parts imported from the European Union could last for another six months.
"Donald Trump hasn't made a decision in relation to EU auto tariffs, and that is acting as a cap to eurozone equity benchmarks. The chatter last week was the US leader would defer the decision to impose tariffs by six months. Trump might be saving the EU economic war for his campaign trail next year," CMC Markets analyst David Madden commented.
In the FTSE 100, accounting software firm Sage Group said it will secure GBP232 million from the sale of a subsidiary to global payments company Elavon.
The disposal of Sage Pay, which generated revenue of GBP41 million last year, is subject to Elavon securing approval from US regulators.
Technical products and services firm Diploma reported full-year revenue growth of 12% to GBP544.7 million.
The FTSE 250 firm's pretax profit stretched 15% year-on-year to GBP83.5 million, and Diploma upped its full-year dividend to 29.0 pence per share from 25.5p.
Looking ahead, Diploma said: "Despite the uncertain political and economic environment impacting industrial markets, the board remains confident of further progress in the current financial year as moderately lower underlying growth will be offset by a strong contribution from acquisitions."
Diploma spent GBP78.3 million, a record investment, on acquisitions in the year ended September 30.
M&A activity continued on Monday, following a busy day for the London market on Friday, which saw Amerisur Resources, Carpetright and Eddie Stobart Logistics all agreeing to purchases.
On Monday, Consort Medical was subject to a takeover bid from a subsidiary of Swedish pharmaceutical firm Recipharm AB.
Recipharm will acquire the London-listed medical devices maker for GBP505 million, paying 1,010p for each Consort share, about a 40% premium. The deal gives the company an enterprise value of GBP627 million, including debt.
In the US, the National Association of Home Builders' housing market index for November is published at 1400 GMT.
By Eric Cunha; ericcunha@alliancenews.com
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Sage Group (SGE)
Diploma (DPLM)