FTSE 100 set for positive start after mortgage data - Proactive Investors UK

• FTSE 100 tipped to open 20 points higher at 6,186
• Nationwide House Price Index falls 1.7% to 435.5 in May
• Annual house price growth slows to 1.8% from 3.8% in April

7.15am: Annual house price growth slows in May

The Nationwide’s index of house prices fell in May, sliding 1.7% to 435.5 from 442.8 in April.

The average price of a house sold in May was £218,902, down from £222,915 in the previous month.

“UK house prices fell by 1.7% over the month in May, after taking account of seasonal effects – this is the largest monthly fall since February 2009. As a result, the annual rate of house price growth slowed to 1.8%, from 3.7% in April,” reported Robert Gardner, the mortgage lender’s chief economist.

Gardner revealed that around 15% of people surveyed were considering moving house as a result of “life in lockdown”, with 34% stating they “think differently about their home as a result of the COVID-19 outbreak, especially the importance of a garden and the need for more indoor space”.

Shareholders in DIY products seller Kingfisher PLC (LON:KGF) will be pleased to learn that 22% of people surveyed said they had changed their mind over what constituted the most important aspects of a home and are considering improving their home as a result of COVID-19.

Spread betting quotes are suggesting the FTSE 100 index will open at around 6,186.

6.45am: Blue-chips to continue regaining lost ground

The FTSE 100 is expected to continue regaining lost ground on Tuesday as economic data show many countries around the world continuing to creep back towards normal. 

London’s blue chips are tipped to start 33 points higher by bread betters on the IG spread-betting platform, adding to the near-90 point gain to finish at 6,166 a day earlier.

Wall Street stock indices finished modestly higher overnight despite a continued tension in the country as the President called for a military presence in the streets to quell Black Lives Matter protests after the police killing of George Ford.

The Dow Jones share index added almost 92 points or 0.4% to 25,475, while the broader S&P 500 rose 0.4% and the tech-led Nasdaq Composite added 0.7%.

Asia is in the green on Tuesday morning, led by the Nikkei 225 in Tokyo, which is up 1.5%, while the Hang Song in Hong Kong is up 0.6% and the Shanghai Composite is just on the right side of flat. 

Tuesday’s agenda brings the fourth round of Brexit negotiations, which are taking place over video conference, as well as house price data from Nationwide and lending data from the Bank of England. 

On Tuesday's business agenda there is a continuation of the stream of mid-cap company updates and some macroeconomic data that will be of interest to investors in various industries.

Among the company news should be final results from Electrocomponents PLC (LON:ECM), with the market last hearing from the industrial distributor in mid-March 23.

At that point, the FTSE 250 group confirmed a significant drop in sales volumes to customers into locked-down markets such as Italy and France.

With Electro reporting a strong cash position and saying it had been able to leverage its global supply chain and strong online offering to mitigate the worst impact, using its UK hub to meet global demand, analysts at Peel Hunt said they "don't see a reason for these mini-trends to have changed materially". 

There should also be full-year numbers from Workspace Group plc (LON:WKP), with the dividend in focus since the property owner has deferred or reduced rent for its hardest-hit tenants, collecting only half of the rent due at the end of March.

“Despite the disruption, the group thinks profit for the year ended March 31 will be in line with expectations, so it’s the outlook statement that’s most important next week,” analysts at Hargreaves Lansdown said.

Around the markets

Pound - up 0.1% at US$1.2494

Oil - Brent up 0.8% at US$38.61

Gold - down 0.1% at US$1,748.60

Significant announcements expected on Tuesday:

Finals: Electrocomponents PLC (LON:ECM), Mediclinic International Plc (LON:MDC), Card Factory PLC (LON:CARD), Vianet Group PLC (LON:VNET), Inspired Energy plc (LON:INSE)

AGMs: Aviva PLC (LON:AV.), Saga PLC (LON:SAGA)

Business headlines

FT

• Trump vows to deploy US military to quell protests - President says he will ‘dominate the streets’ following unrest over killing of George Floyd
• Mining remains a bright spot in M&A gloom - most large mines are operating without interruption as China continues to suck in their products
• Investor plans £15bn support for UK companies toiling with crisis loans - Business Growth Fund proposes state-backed scheme to aid indebted companies emerging from pandemic

The Times

• We’ll compromise if you do too, Britain tells EU - compromise to be offered on fisheries and “level playing field” trade rules if the European Union backs off from its “maximalist” demands on regulatory alignment and fishing access.
• Senior Facebook employees are openly criticising Mark Zuckerberg’s refusal to take action over posts by President Trump that rival social media sites have censured for “glorifying violence”. 
• Investors, brokers and market-makers have given broad backing to proposals to cut the stock market trading day by ninety minutes to only seven hours.

Telegraph

• Watchdog prepares legal action against insurers over Covid payouts - some insurers decided to pay out on claims as the threat of legal action loomed
• Dealers are open again - but who wants to buy a car? The motoring industry is getting back into gear with socially distant selling, but questions remain over consumer demand
• Monsoon tells landlords to waive rents or face closures - founder Peter Simon has been trying to offload the company for the past two months

Guardian

• The ongoing coronavirus pandemic will haunt the US economy for a decade, wiping close to $8tn off economic growth, according to new projections released by the Congressional Budget Office (CBO).
• The Ted Baker founder, Ray Kelvin, has slashed his stake in the fashion retailer by more than half, handing control of the company to an investor known as “the Rottweiler” as part of an emergency £105m fundraising to get the business through the coronavirus pandemic.
• Shoppers rushed back to high streets and retail parks on Monday as the reopening of car showrooms, markets and some Ikea stores marked the easing of lockdown restrictions in England.

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2020-06-02 06:42:42Z
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