(Alliance News) - Stocks in London are set to open higher on Tuesday, building on gains from Monday afternoon, when markets recovered from a drab start to the week to end slightly higher.

IG says futures indicate the FTSE 100 to open 40.5 points higher, 0.5%, at 8,739.81 on Tuesday. The index of London large-caps rose 14.75 points, 0.2%, at 8,699.31 on Monday. The index had traded in the red for much of the day, as credit rating cut for the US weighed on enthusiasm.

In New York, the Dow Jones Industrial Average rose 0.3% on Monday, the S&P 500 ended 0.1% higher and the Nasdaq Composite edged up slightly.

"After Moody's notched US sovereign credit down late Friday, equity markets opened this week with a brief panic… but not a panic anyone really bought into," SPI Asset Management analyst Stephen Innes commented.

"The S&P 500 clawed back a full 1.1% intraday drop and came within a hair of breaking into bull market territory—before stalling out just shy of euphoria as retail earnings nerves set in."

This week, the likes of Home Depot, TJX and Ross Stores are among the US retail names reporting.

Innes added: "Treasuries rebounded with gusto. Even the 30-year, which briefly kissed 5% yields, came back like a boomerang. Helping matters? A tactical oil pullback, as Trump teased the potential for immediate Ukraine-Russia talks."

The yield on the US 10-year Treasury was quoted at 4.46% early Tuesday UK time, narrowing from 4.49% at the time of the London equities close on Monday. The yield on the US 30-year Treasury slimmed to 4.91% from 4.96%.

US President Donald Trump has said Russia and Ukraine will "immediately" begin ceasefire negotiations after what he described as an "excellent" call with Russian President Vladimir Putin that lasted more than two hours.

Trump also spoke to Ukrainian leader Volodymyr Zelensky and European leaders in the hope of making progress toward a ceasefire.

"The conditions for that will be negotiated between the two parties, as it can only be, because they know details of a negotiation that nobody else would be aware of," Trump said in a social media post.

Sterling rose to USD1.3378 on Tuesday morning, from USD1.3365 at the time of the London equities close on Monday. The euro was unmoved at USD1.1254. Against the yen, the dollar faded to JPY144.57 from JPY144.85.

Gold slipped to USD3,211.91 an ounce from USD3,233.73. A barrel of Brent bought USD65.26, fading from USD65.41.

In Tokyo, the Nikkei 225 added 0.4%. Sydney's S&P/ASX 200 was up 0.7%. In China, the Shanghai Composite was up 0.5%. The Hang Seng Index in Hong Kong surged 1.3%.

China's central bank on Tuesday cut two key interest rates to historic lows, as Beijing battles to stimulate its economy amid see-saw trade tensions with the US.

The People's Bank of China said Tuesday that the one-year loan prime rate, the benchmark for the most advantageous rates lenders can offer to businesses and households, would be cut to 3.00% from 3.10%.

The five-year LPR, the benchmark for mortgage loans, was cut to 3.50% from 3.60%.

Both rates were last cut in October to what were then record lows.

Australia's central bank has cut its key interest rate for the second time this year. The Reserve Bank of Australia has lowered its cash rate target by 25 basis points to 3.85%, down from 4.10%.

This marks the first rate cut since February, when the RBA also trimmed the rate by 25 basis points.

RBA commented: "Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance. Data on inflation for the March quarter provided further evidence that inflation continues to ease.

"With inflation expected to remain around target, the board therefore judged that an easing in monetary policy at this meeting was appropriate. The board assesses that this move will make monetary policy somewhat less restrictive. It nevertheless remains cautious about the outlook, particularly given the heightened level of uncertainty about both aggregate demand and supply."

Tuesday's economic calendar has a German producer price index reading at 0700 BST, before flash eurozone consumer confidence data at 1500 BST.

The domestic corporate calendar sees full-year results from telecommunications company Vodafone and property company LondonMetric Property plus half-year results from technical products and services provider Diploma.

By Eric Cunha, Alliance News news editor

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