(Alliance News) - Stocks in London are set to see a slight rise at Tuesday's open, as investors look ahead to UK labour data.

IG says futures indicate the FTSE 100 to open up 4.0 points at 7,277.79 on Tuesday. The index of London large-caps closed up 16.85 points, 0.2%, at 7,273.79 on Monday. It had started the new week on a slightly more positive note, after five consecutive days of losses.

Sterling was quoted at USD1.2883 early Tuesday, higher than USD1.2828 at the London equities close on Monday.

The pound got made gains against a weaker dollar, also benefitting from hawkish rhetoric from the head of the Bank of England as well as the UK's chancellor.

Speaking at London's Mansion House, BoE Governor Andrew Bailey has vowed that the central bank must "see the job through" to quickly bring inflation back down. Bailey stressed that "unacceptably high" inflation is currently his "pre-occupation".

Meanwhile, UK Chancellor Jeremy Hunt said he is prioritising tackling inflation over tax cuts, in a blow to Tory MPs clamouring for a pre-election giveaway.

Investors will be scrutinising UK wage inflation figures due shortly, which is expected to tick up to 6.8% in the three months to May, from 6.5% in the previous period - including bonuses. The unemployment rate is expected to be unchanged at 3.8%.

The euro traded at USD1.1019 early Tuesday, rising from USD1.0984 late Monday. Against the yen, the dollar was quoted at JPY140.73, down versus JPY141.52.

"US markets also underwent a cautious start to the week with attention focussed on this week's inflation numbers, which are due tomorrow and could go some way to indicating whether we see any more rate hikes beyond this month," said CMC's Michael Hewson.

In the US on Monday, Wall Street ended in the green, with the Dow Jones Industrial Average up 0.6%, the S&P 500 up 0.2% and the Nasdaq Composite up 0.2%.

In China, equities were boosted by the prospect of economic support measures from Beijing.

The Shanghai Composite was up 0.3%, while the Hang Seng index in Hong Kong was up 1.2%.

Chinese authorities on Monday urged banks and other financial institutions to provide easier terms for ailing developers by renegotiating the terms of their loans, with the aim of ensuring homes under construction are delivered. On Tuesday, state-run financial newspapers said more announcements were in the pipeline, as well as measures to boost business confidence.

The moves come as the vast property industry in China strains under the weight of enormous debts, with some firms such as Evergrande on the verge of collapse. The crisis has sent shivers through the world's number two economy, which has in turn weighed on global growth.

The S&P/ASX 200 in Sydney was up 1.2%, boosted by a stronger outlook for commodities amid the potential economic support in China.

The Nikkei 225 index in Tokyo was down 0.2% in late dealings.

Gold was quoted at USD1,929.57 an ounce early Tuesday, higher than USD1,923.22 on Monday. Brent oil was trading at USD78.06 a barrel, rising from USD78.48.

In Tuesday's UK corporate calendar, there will be a trading statement from veterinary products firm Dechra Pharmaceuticals, as well as full-year results from business recovery company Begbies Traynor Group.

The economic calendar for Tuesday has the UK unemployment reading and inflation data from Germany at 0700 BST.

By Elizabeth Winter, Alliance News senior markets reporter

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