2nd Jun 2025 07:48
(Alliance News) - The FTSE 100 was called slightly lower on Monday, ahead of manufacturing PMI data from the UK and other regions, and following US President Donald Trump's claim that the US will double steel and aluminium import tariffs.
Also, the UK is announcing plans to build up to 12 new nuclear-powered attack submarines and invest GBP15 billion in its warhead programme.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called down 1.9 points at 8,770.48
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Hang Seng: down 1.6% at 22,929.77
Nikkei 225: down 1.3% at 37,488.84
S&P/ASX 200: down 0.3% at 8,412.10
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DJIA: closed down 0.1% at 42,270.07
S&P 500: closed down, under 0.1%, at 5,911.69
Nasdaq Composite: down 0.3% at 19,113.77
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US 10-year Treasury yield: 4.42% (4.41%)
US 30-year Treasury yield: 4.95% (4.92%)
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EUR: higher at USD1.1381 (USD1.1348)
GBP: higher at USD1.3503 (USD1.3476)
USD: lower at JPY143.36 (JPY144.23)
GOLD: higher at USD3,327.36 per ounce (USD3,286.33)
OIL (Brent): higher at USD64.13 a barrel (USD62.53)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
China Dragon Boat Festival. Financial markets in Shanghai closed, Hong Kong open.
10:00 CEST eurozone manufacturing PMI
09:55 CEST Germany manufacturing PMI
09:30 BST UK mortgage approvals
09:30 BST UK manufacturing PMI
09:45 EDT US manufacturing PMI
10:00 EDT US ISM manufacturing PMI
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UK house price growth accelerated in May, amid "supportive" underlying conditions for home buyers, according to an index. Property values increased by 0.5% month-on-month in May, following a 0.6% fall in April, taking the average UK house price to GBP273,427, Nationwide Building Society said. The typical UK house price increased by 3.5% annually in May, compared with 3.4% in April. Robert Gardner, Nationwide's chief economist, said: "Despite wider economic uncertainties in the global economy, underlying conditions for potential home buyers in the UK remain supportive." A stamp duty holiday ended in March, with recent figures showing there was a stampede to get sales over the line before the deadline, followed by a transactions dip. HM Revenue & Customs, HMRC, figures published last week showed an estimated 64,680 house sales took place in April – 64% lower than the 177,440 reported in March. The study indicated the figures had been affected by changes to stamp duty rates which apply in England and Northern Ireland. Outlining underlying conditions which could be positive for home buyers, Gardner said: "Unemployment remains low, earnings are rising at a healthy pace, household balance sheets are strong and borrowing costs are likely to moderate a little if [the Bank of England base rate] is lowered further in the coming quarters as we, and most other analysts, expect."
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The UK will build up to 12 new nuclear-powered attack submarines and invest GBP15 billion in its warhead programme, the prime minister will announce on Monday as the government unveils its strategic defence review. Significant investment in the UK nuclear warhead programme this parliament and maintaining the existing stockpile are among the 62 recommendations that the government is expected to accept in full. But questions were also raised about its commitment to defence spending after the Defence Secretary could not confirm the Treasury had guaranteed funding to bring it up to 3% of GDP by 2034. Defence Secretary John Healey said: "Our outstanding submariners patrol 24/7 to keep us and our allies safe, but we know that threats are increasing and we must act decisively to face down Russian aggression. With new state-of-the-art submarines patrolling international waters and our own nuclear warhead programme on British shores, we are making Britain secure at home and strong abroad, while delivering on our Plan for Change with 30,000 highly skilled jobs across the country."
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Airlines on Monday revised down their traffic and profit forecasts for 2025, citing "headwinds" for the global economy, with industry chiefs warning of the risk of increased tariffs impacting the sector. The International Air Transport Association estimates fewer than 5 billion air journeys will take place this year, compared with the previously forecast 5.22 billion. "The first half of 2025 has brought significant uncertainties to global markets," IATA's Director General Willie Walsh told its annual general meeting in New Delhi. But he added: "Considering the headwinds, it's a strong result that demonstrates the resilience that airlines have worked hard to fortify." Cumulative airline profits will reach USD36 billion this year, USD600 million less than expected, IATA said. Commercial aviation revenues are expected to remain below the USD1 trillion forecast in the previous December projections, with IATA now reporting USD979 billion. Walsh, addressing IATA delegates, called for the aviation sector to be spared from increased tariffs – though he did not name US President Donald Trump, who unveiled sweeping duties on trading partners in April.
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Trump said Friday that he would double steel and aluminium import tariffs to 50% from next week, the latest salvo in his trade wars aimed at protecting domestic industries. "We're going to bring it from 25% to 50%, the tariffs on steel into the US of America," he said while addressing workers at a US Steel plant in Pennsylvania. "Nobody's going to get around that," he added in the speech before blue-collar workers in the battleground state that helped deliver his election victory last year. Shortly after, Trump wrote in a Truth Social post that the elevated rate would also apply to aluminium, with the new tariffs "effective Wednesday, June 4th". In response, the EU on Saturday said it was ready to take countermeasures, which could happen earlier than July 14. As things currently stand, EU counter-tariffs already planned due to Trump's initial tariff decisions would automatically come into force on this date. "This decision adds further uncertainty to the global economy and increases costs for consumers and businesses on both sides of the Atlantic," said a spokesman for the European Commission in Brussels, which is responsible for EU trade policy.
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The US signalled renewed trade tensions with China on Friday, with Trump arguing that Beijing had "totally violated" a deal to de-escalate tariffs. The world's two biggest economies had agreed earlier this month to temporarily lower staggeringly high tariffs they had imposed on each other, in a pause to last 90 days, after talks between top officials in Geneva. On Friday, Trump wrote on his Truth Social platform: "China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US," without providing further details. Asked about the post on CNBC, US Trade Representative Jamieson Greer said: "The Chinese are slow-rolling their compliance, which is completely unacceptable." China said Monday it "firmly rejects" US claims.
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BROKER RATING CHANGES
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Berenberg cuts Intertek price target to 5,700 (6,000) pence - 'buy'
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Goldman Sachs raises Aberdeen Group to 'buy' (neutral) - price target 205 (180) pence
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Jefferies reinitiates Drax with 'buy' - price target 750 pence
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COMPANIES - FTSE 100
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Vodafone Group and a CK Hutchison subsidiary announced Monday that the merger of Vodafone UK and Three UK successfully completed on Saturday, May 31. The new VodafoneThree business is 51% owned by Vodafone and 49% by CK Hutchison Group Telecom Holdings Ltd, and Vodafone will fully consolidate VodafoneThree in its financial results. Vodafone said VodafoneThree will invest GBP11 billion over the next 10 years, "creating one of Europe's most advanced 5G networks, giving millions of customers and businesses up and down the country a vastly superior mobile experience".
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AstraZeneca on Sunday said its monoclonal antibody Imfinzi in combination with standard of care chemotherapy demonstrated significant and meaningful improvement in event-free survival in early stage gastric cancer, compared to chemotherapy alone. The Cambridge, England-based pharmaceutical company said patients were treated with neoadjuvant Imfinzi in combination with chemotherapy before surgery, followed by advujant Imfinzi with chemotherapy and then Imfinzi monotherapy. AstraZeneca said patients treated with the Imfinzi-based regimen before, during and after surgery had a 29% reduction in the risk of disease progression, recurrence or death compared to chemotherapy alone. The results came from a planned interim analysis from the Matterhorn phase 3 trial.
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COMPANIES - FTSE 250
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Sirius Real Estate announces its consolidated financial results for the financial year to March 31. Pretax profit was up 75% at EUR201.6 million from EUR115.2 million in 2024, which Sirius said was primarily due to an EUR81.0 million asset management led valuation gain, up from EUR12.4 million the year before. The second-half dividend was 3.09 euro cents per share, up from 3.05 cents, increasing the total dividend for the year by 1.7% to 6.15 cents from 6.05 cents. Revenue increased to EUR317.5 million from EUR288.8 million, while rent roll grew 6.3% like for like to EUR205.6 million from EUR193.5 million. Looking ahead, Sirius said it is trading in line with management expectations in the new financial year. "We are also working hard to ensure we are as well placed as possible to benefit from the recently announced increases in defence spending to 2.5% of GDP in the UK and, most notably, in Germany...even if only a small part of this flows into our asset classes, defence has the potential to become a major growth sector and driver of demand for warehouse and manufacturing space, where the rent is ultimately government derived," Chief Executive Officer Andrew Coombs said. "We are actively positioning our offering to attract some of this expected business."
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ME Group International said that its "record trading momentum" continued in the six months ended April 30. Pretax profit increased around 14% on-year and revenue by around 2%, "driven by the strong continued performance in our laundry business". "Laundry operations delivered a strong performance with revenue up 13.3%...This reflected ongoing demand across all our geographies," ME Group said. However, Photobooth revenue decreased by approximately 3.3% due to a now-resolved issue with new printers. Looking forward, the company said it "continues to anticipate FY 2025 profit before tax will be between GBP76 million and GBP80 million".
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OTHER COMPANIES
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Capita announced that its Pension Solutions business has secured a UK contract worth GBP37 million to deliver pensions administration services and transformational projects for a global parent company's UK pension schemes. The contract will commence on November 1, 2025 and will run for a term of five years, with an option to extend for an additional year, Capita said. "We are delighted to secure our partnership, supporting members to engage with their scheme and with the benefits it provides," commented Capita Pension Solutions Managing Director Chris Clements. "We are aligned in our strategic goal of creating better member outcomes by cutting through complexity and offering individually tailored engagement to inform and support key pension life decisions."
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By Emma Curzon, Alliance News reporter
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