FTSE 100 preview: Index to extend gains amid US-China deal hopes

The FTSE 100 looks set to kick off the new week in positive territory, building on the previous session’s gains, finding support in hopes for a US-China trade deal. Royal Bank of Scotland Group (LON:RBS) will be in focus on the corporate front, amid reports that the Treasury has agreed to publish a document related to the company’s controversial Global Restructuring Group (GRG) division.

Index to open higher

IG’s opening calls suggest that the FTSE 100 will start trading 0.34 percent higher at 7,131 points. The blue-chip index is likely to take cues from Asia, where shares have advanced this morning following a report in the Wall Street Journal that Washington is considering lifting most or all of its tariffs on Beijing.

“Following the collapse of the Trump-Kim summit last week, all eyes are on the supposedly upcoming US-China trade deal with the Trump-Xi summit likely to follow later this month,” analysts at Singapore’s OCBC Treasury Research said in a morning note, as quoted by CNBC.

In the US, shares rose on Friday. At home, the Footsie also started March on the front foot, adding 0.5 percent on Friday, as investors digesting corporate news and Brexit developments.

“I think the market is progressively anticipating a compromise (on Brexit) [...] I remain optimistic regarding the pound and more domestic UK shares,” Raymond James analyst Chris Bailey said, as quoted by Reuters.

Monday’s agenda

Macroeconomic releases are in short supply this morning, with only the UK construction purchasing managers’ index for February due out at 09:30 GMT. IG reports that the index is forecast to have fallen to 50.1, from 50.6. There are no blue-chips scheduled to update investors on their performance this morning.

In other news, City A.M. reports that the Treasury has yielded to pressure from MPs to publish a key agreement it signed with RBS following allegations it had significant influence over the bank’s GRG unit.