FTSE 100 LIVE: Blue-chips flat as Wall Street makes a subdued start

Across the pond, US stocks were more subdued after Monday's AI-fuelled charge, with the Nasdaq up 0.4% having touched a record the day before and the S&P 500 and Dow adding 0.2%.

The mood is being buoyed by warmer noises on trade, with Treasury Secretary Scott Bessent hailing "very successful" preliminary US-China talks ahead of Thursday's Trump-Xi showdown.

Oil, meanwhile, is on the slide, Brent off more than 2% on reports Iran could reopen the Strait of Hormuz within a week if Washington eases the pressure.

Meta remains the darling, rising again after its Muse AI app topped the App Store, dragging the rest of the Magnificent Seven along with it.

Back home, the Footsie is treading water.

Wall Street looks set to keep the party going, with US stock futures edging higher after Monday's AI-fuelled surge handed the S&P 500 its best day since August.

Dow futures were up 163 points, with the S&P 500 and Nasdaq-100 also in the green.

Meta did much of the heavy lifting, its shiny new AI model stoking hopes that consumers will finally embrace AI assistants en masse. Chipmakers AMD and Intel tagged along for the ride.

Elsewhere, Brent crude has slipped below $100 a barrel, helped by Iran dangling the reopening of the Strait of Hormuz in return for US de-escalation.

All eyes now turn to Trump's UN address, then Thursday's sit-down with Xi Jinping.

In London, the FTSE 100 was up 7 points.

The blue-chip index is on something of a mini-roller coaster ride, dipping and rising around the gain line. As we write, it's up 23 points, led by Kingfisher and Smiths Group (both on the back of better-than-expected results).

Outside of this, JD Sports (up 3%) seems to be back in demand as analysts begin to digest its foray into Mexico, one of the bigger retail markets.

Burberry has one fewer friend in the City this morning.

RBC Capital Markets has cooled on the trench coat maker, pulling its rating back to "sector perform" from "outperform". Translation: RBC now reckons the shares will do no better than the luxury pack as a whole.

The price target took a haircut too, down to £12 from £14.

The gripe? Appetite for expensive handbags and the like is going off the boil, and RBC would rather not be caught holding an outperform call while the luxury tide goes out.

Investors, for their part, seem unbothered. The shares were up 1.5% at £10.41, apparently deciding that a lukewarm broker note is nothing a good check scarf can't shrug off.

The shares are up 9% in morning trading. Analysts at Peel Hunt, the broker, welcomed the numbers, keeping an "add" rating and a 350p price target.

The firm pointed to steady progress on strategy, with trade sales up 16% excluding Screwfix and now 31% of the total, and e-commerce also up 16%.

The FTSE 100 is off to a rather pedestrian start, rising just over six points to 10,745.37.

Kingfisher was the standout, delivering a solid set of interims and upgrading its outlook for the remainder of the financial year. The shares shot up 13% in early trading.

Smiths Group, the engineer, was second on the leaderboard, up 4% after a generally reassuring set of prelims.

UK borrowing dampened the mood somewhat (see our earlier post), leaving Chancellor John Healey with about as much fiscal wriggle room as a shackled Harry Houdini. Can Healey find the secreted key to the handcuffs? Economists doubt it

The UK's borrowing headache deepened on Tuesday after official figures showed Britain borrowed £18.3 billion in August, some £3.5 billion more than the fiscal watchdog had pencilled in.

With debt interest payments up at £8.8 billion, the numbers leave Chancellor John Healey precious little room before his 28 October Budget.

Economists reckon he is now boxed in: Capital Economics called the picture "dismal" and expects tax rises or spending cuts of up to £14 billion to rebuild his buffer.

Shadow chancellor Andrew Griffith jabbed that it took "rare fiscal incontinence" to log record tax receipts yet still watch borrowing climb.

London's blue-chip index is set to nudge open around 17 points higher on Tuesday, building on Monday's near-80-point advance and keeping the FTSE 100 in a decidedly cheerful frame of mind.

The good mood is being imported wholesale from Asia, where technology stocks did the overnight heavy lifting.

The spark? Meta's Muse AI assistant, popular enough since launch to shrug off last week's wobble over safety warnings from the sector's big beasts. South Korea jumped, Taiwan hit a record, and the AI trade is firmly back in vogue.

Helping the cause, Brent crude slipped back to around $100 a barrel after a 3% tumble, quietening one of the market's nagging worries.

The main event looms on Wednesday, when Xi Jinping lands in Washington to sit down with Donald Trump. Optimists want a trade truce; sceptics are braced for warm words and precious little else.