(Alliance News) - Stocks in London are set to open higher on Tuesday, following a good showing in New York.

IG says futures indicate the FTSE 100 to open up 14.0 points, 0.2%, at 7,521.15 on Tuesday. The index of London large-caps closed down 17.01 points, 0.2%, at 7,507.15 on Monday.

"European markets underwent a modestly positive start to the week despite concerns over the Chinese real estate sector which weighed on the FTSE100, as equities tried to bounce back after two weeks of declines," commented CMC Markets' Michael Hewson.

In the US on Monday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.1%, the S&P 500 up 0.6% and the Nasdaq Composite 1.1%.

In Asia on Tuesday, trading was mixed. In China, equities weakened as economic data pointed to further weakness in the Chinese economy. The Shanghai Composite was down 0.8%, while the Hang Seng index in Hong Kong was down 1.2%.

Chinese retail sales, a key gauge of consumption, grew 2.5% year-on-year in July, the National Bureau of Statistics said, down from 3.1% in June and falling short of analyst expectations. In addition, the NBS said industrial production grew 3.7% in July from a year ago, down from 4.4% in June.

It adds to the recent weak data from China, and suggests the country may struggle to achieve its 5% growth target set for the year.

Also on Tuesday, the People's Bank of China cut the medium-term lending facility rate – the interest for one-year loans to financial institutions – from 2.65% to 2.5%. A lower MLF rate reduces commercial banks' financing costs, in turn encouraging them to lend more and potentially boosting domestic consumption.

"The market was expecting the PBoC to wait until September before easing again, and today's cuts suggest that the authorities' concern about the state of the macroeconomy is mounting," ING noted.

Meanwhile, the Nikkei 225 index in Tokyo was up 0.7%.

Japan's economy grew 1.5% in the three months to June, official data showed, beating expectations on the back of strong exports. The average forecast for quarter-on-quarter growth in the world's third-largest economy had been 0.8%, according to Bloomberg News. The data, released by the Cabinet Office, means the economy grew an annualised 6.0%, compared with the market expectation of 2.9%, giving Japan three straight quarters of growth.

The S&P/ASX 200 in Sydney was up 0.4%.

Sterling was quoted at USD1.2691 early Tuesday, edging up from USD1.2690 at the London equities close on Monday. The euro traded at USD1.0913, lower than USD1.0918. Against the yen, the dollar was quoted at JPY145.46, up versus JPY145.31.

Gold was quoted at USD1,906.21 an ounce early Tuesday, lower than USD1,909.82 on Monday.

Brent oil was trading at USD86.22 a barrel, lower than USD86.47.

Tuesday's economic calendar has a UK unemployment reading at 0700 BST, before US retail sales at 1330 BST.

The local corporate calendar has half-year results from Legal & General and Just Group. Bookmaker 888 also reports interim numbers.

By Elizabeth Winter, Alliance News senior markets reporter

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