30th Jun 2025 07:54
(Alliance News) - London's FTSE 100 is set to open higher on Monday, despite warnings for autumn tax hikes over the weekend, as UK gross domestic product grows as expected during the first quarter of 2025.
Meanwhile, the UK government will set out the concessions it has made to its welfare reforms in a reading on Tuesday, and tariff cuts for the UK automotive and aerospace sectors come into effect on Monday following a "historic trade deal" with the US.
In early corporate news, Chemring inks a GBP20 million deal for the takeover of Landguard Nexus, and Porvair sees profit growth in the first half of its financial year.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 0.1% at 8,804.41
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Hang Seng: down 0.2% at 24,228.71
Nikkei 225: closed up 0.6% at 40,376.55
S&P/ASX 200: closed up 0.3% at 8,542.30
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DJIA: closed up 432.43 points, or 1.0%, at 43,819.27
S&P 500: closed up 32.05 points, or 0.5%, at 6,173.07
Nasdaq Composite: closed up 105.54 points, or 0.5%, at 20,273.46
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US 10-year Treasury yield: 4.28% (4.27%)
US 30-year Treasury yield: 4.84% (4.82%)
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EUR: up at USD1.1732 (USD1.1717)
GBP: up at USD1.3731 (USD1.3713)
USD: down at JPY143.94 (JPY144.75)
Gold: up at USD3,293.86 per ounce (USD3,273.76)
(Brent): down at USD66.62 a barrel (USD66.83)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
09:00 BST eurozone money supply
09:30 BST UK money supply
09:30 BST UK mortgage approvals
13:00 BST Germany CPI
14:45 BST US Chicago PMI
15:30 BST US Dallas Fed manufacturing index
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UK gross domestic product grew as expected during the first quarter of 2025, according to data from the Office for National Statistics on Monday. Real GDP is estimated to have increased by 0.7% between January and March, in line with the ONS's first estimate. This is accelerated from a 0.1% growth in the prior quarter. On-year, real GDP is estimated to have increased by an unrevised 1.3%, also in line with the first estimate. Growth was driven by a 0.7% rise in the services sector and a 1.3% increase in production, noted the ONS. The construction sector grew by 0.3%. Real GDP per head is estimated to have risen 0.6% during the first quarter, revised up from the first estimate increase of 0.5%.
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Tariff cuts for the UK automotive and aerospace sectors have come into force after Prime Minister Keir Starmer finalised parts of a deal for relief from US import taxes. Car manufacturers exporting to the US will face a 10% tariff quota, down from 27.5%, while the aerospace sector will see a 10% levy removed entirely. Starmer hailed the "historic trade deal" with the US, clinched after Donald Trump imposed the import taxes as part of his "liberation day" tariffs on countries across the world. The prime minister and US president finalised the deal for those sectors at the G7 summit, but levies on steel have been left standing at 25% rather than falling to zero as originally agreed. Talks are ongoing to secure 0% tariffs on core steel products from the UK.
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There are predictions of tax rises in the UK's autumn budget after Keir Starmer U-turned on welfare reforms in the face of a backbench rebellion. The UK prime minister said that the concessions strike "the right balance", but think tanks have warned that the changes announced in the early hours of Friday morning have made Chancellor Rachel Reeves's "already difficult budget balancing act that much harder". Downing Street declined to rule out the possibility of increases in the autumn, telling reporters on Friday that "tax decisions are set out at fiscal events". The concessions on offer include protecting personal independence payments for all existing claimants, while all existing recipients of the health element of Universal Credit will have their incomes protected in real terms. The Institute for Fiscal Studies said on Friday that the changes make tax rises in the budget expected in the autumn more likely.
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Starmer has said he did not get to grips with the growing rebellion over welfare reforms earlier as he was focused on international affairs. The prime minister said he was occupied with the G7 and Nato summits and the escalating tensions in the Middle East for much of the past two weeks. He defended the eventual U-turn, which came after more than 100 members of parliament launched a bid to kill the legislation with an amendment. On Saturday, the prime minister told the Welsh Labour conference the "broken" welfare system must be fixed "in a Labour way". He said: "We cannot take away the safety net that vulnerable people rely on, and we won't, but we also can't let it become a snare for those who can and want to work."
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Around 22% of homes listed for sale in the UK have been on the market for over six months and remain unsold, according to analysis by property website Zoopla. House price growth is cooling as more homes are put on the market, the website said. The average estate agent has 37 homes for sale, compared to 32 last year. Zoopla said that house prices across the UK generally increased by 1.4% annually in May.
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BROKER RATING CHANGES
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JPMorgan cuts Centrica to 'neutral' (overweight) - price target 167 (170) pence
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Jefferies cuts Hill & Smith price target to 2,300 (2,540) pence - 'buy'
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Barclays raises Zegona Communications price target to 1,100 (800) pence - 'overweight'
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COMPANIES - FTSE 100
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Vodafone announces that SatCo, its new joint venture satellite firm with AST SpaceMobile, will be headquartered in Luxembourg. The venture will deploy a small network of earth stations that integrate with operators of existing 4G and 5G networks, providing backhaul links and extended coverage across Europe. "This is an important initiative for Europe," says Vodafone Chief Executive Officer Margherita Della Valle. "Our service will ensure all European citizens, businesses, and governments enjoy uninterrupted, ubiquitous mobile broadband connectivity across the whole continent. Europe can take the lead in new direct-to-device mobile broadband technology."
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COMPANIES - FTSE 250
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Henderson European Trust reports its net asset value total return for the six months that ended March 31 is negative 0.2%, against a positive 3.5% return on its benchmark index, the FTSE World Europe excluding UK. NAV per share at March 31 was 199.7 pence, down 0.8% from 201.4p at September 30. The trust declares an interim dividend of 1.4p per share, 54% lower on-year from 3.05p, and notes that a further pre-liquidation dividend may be paid ahead of its proposed merger with Fidelity European Trust. "From world leading luxury brands to drug delivery systems, European companies continue to offer robust returns for their shareholders and yet even today remain valued at a discount to their US counterparts," says Chair Vicky Hastings.
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Chemring reports it has conditionally agreed to acquire Landguard Nexus, the designer and manufacturer of software defined radio systems and security products for defence, government and law enforcement clients. The firm will pay up to GBP20 million, via a GBP14 million cash payment upon completion of the acquisition and cash earnouts totalling up to GBP6 million dependent on the completion of performance milestones. Landguard reported turnover of around GBP7 million for the year that ended January 2025, and Chemring expects the acquisition to be "marginally" earnings enhancing in the year ending October 31, 2026. "The acquisition creates further opportunities for Chemring to enhance and accelerate growth of its Roke business whilst driving strong operational synergies," the company says.
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OTHER COMPANIES
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John Wood Group PLC on Friday said the UK Financial Conduct Authority has launched an investigation into the company, covering a period of nearly two years. The Aberdeen, Scotland-based oilfield and engineering services provider said the probe follows an independent review first announced in November 2024. The FCA investigation will examine matters spanning from January 1, 2023, to November 7, 2024. Wood said it will cooperate fully with the regulator. The company did not disclose the focus of the review or the nature of any potential misconduct. No further details were provided. The FCA separately confirmed on its website on Friday that it has opened an investigation into Wood Group, following the company's earlier disclosure.
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Porvair reports pretax profit of GBP11.3 million in the six months that ended May 31, rising 6.6% from GBP10.6 million the year before. Revenue grows 3.3% to GBP97.7 million from GBP94.6 million, while other operating expenses increase 5.1% to GBP22.8 million from GBP21.7 million. The firm declared an interim dividend of 2.2 pence per share, up 4.8% on-year from 2.1p. "Trading has been mixed across our end markets, with strength in certain industrial businesses and laboratory instruments, offsetting softness in aerospace and foundry together with foreign exchange headwinds," says Chief Executive Officer Hooman Caman Javvi. "Currently, the trading outlook for the second half of the year remains positive. We continue to monitor the near-term macro-economic uncertainty and tariff environment, noting that the group's manufacturing footprint mainly serves local customers."
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By Emily Parsons, Alliance News reporter
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