2nd Sep 2025 06:54
(Alliance News) - Stocks in London are set to open lower on Tuesday, as gold prices soar and EU defence spending is set to reach a new record high.
IG says futures indicate the FTSE 100 to open down 4.7 points, 0.1%, at 9,191.64 on Tuesday. The index of London large-caps closed up 9.00 points, 0.1%, at 9,196.34 on Monday.
Keir Starmer will gather his Cabinet on Monday for its first meeting since a major shake-up of his Downing Street operation as he seeks to reset his government after a challenging summer.
The UK prime minister will chair discussions with Chancellor Rachel Reeves, his deputy Angela Rayner and other senior figures after making a string of new appointments.
The shake-up is a sign that the prime minister is seeking to boost Number 10's economic firepower ahead of the budget this autumn amid dire warnings about the state of the public finances.
Sterling was quoted at USD1.3523 early Tuesday, lower than USD1.3548 at the London equities close on Monday.
The euro traded at USD1.1694 early Tuesday, down from USD1.1705 late Monday. Against the yen, the dollar was quoted up at JPY147.85 versus JPY147.27.
EU military spending is set to hit a fresh record of EUR381 billion in 2025, as countries plough more money into warding off Russia, the bloc's defence agency said Tuesday.
The 10% rise comes as European members of NATO have committed to massively ramp up spending under pressure from US President Donald Trump.
"Europe is spending record amounts on defence to keep our people safe, and we will not stop there," EU foreign policy chief Kaja Kallas said.
The European Defence Agency, EDA, said that of the money being spent this year, close to EUR130 billion was being spent on investments such as new weaponry.
Financial markets were closed in the US on Monday for Labor Day.
In Asia on Tuesday, the Nikkei 225 index in Tokyo shed 0.2%. In China, the Shanghai Composite lost 0.3%, while the Hang Seng index in Hong Kong fell 0.4%. The S&P/ASX 200 in Sydney also faded 0.4%.
Gold was quoted at USD3,495.06 an ounce early Tuesday, higher than USD3,476.94 on Monday. The yellow metal hit a record USD3,501.59 early on Tuesday morning, soaring past its previous record of USD3,500.10 in April.
"This move is not a random anomaly, it rather reflects the confluence of resurging inflation concerns, growing conviction that the Fed soon to resume its easing cycle, and heightened anticipation ahead of Friday's US nonfarm payrolls report. In this sense, gold has become a barometer of market unease and uncertainty across inflation, monetary policy and employment," commented Pepperstone analyst Ahmad Assiri.
Brent oil was trading at USD68.41 a barrel early Tuesday, down from USD68.63 late Monday.
In Tuesday's corporate calendar, full year results from Alumasc and half year numbers from Oxford Nanopore, Johnson Service Group and Uniphar.
In the economic calendar on Tuesday, US manufacturing PMI data and a eurozone inflation print.
By Emily Parsons, Alliance News reporter
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