13th May 2025 06:45
(Alliance News) - London's FTSE 100 is set to open lower on Tuesday, following a New York rally on Monday as the US and China announced a tariff suspension.
IG says futures indicate the FTSE 100 to open down 24.5 points, 0.3% at 8,580.48 on Tuesday. The index of London large-caps closed up 50.18 points, 0.6%, at 8,604.98 on Monday.
UK retail sales increased in March and April, even when accounting for the later timing of Easter, figures showed. Total retail sales in the UK increased 7% annually in April, compared with a 4% decrease in the same month last year, according to data from the British Retail Consortium.
This exceeded the three-month average growth rate of 2.9% and the 12-month average of 1.4%. The BRC added that for March and April together, mitigating the different timings of Easter, total sales increased 4.3% compared to March and April in 2024.
"The sunniest April on record brought with it a boost to retail sales," commented BRC Chief Executive Officer Helen Dickinson. "While the stronger performance was partially a result of Easter falling in April this year, the sunshine prompted strong consumer spending across the board. Food sales performed well as people brought together their family and friends for Easter celebrations, while sales of DIY, homeware and gardening goods shone bright as people made the most of the weather. Clothing sales, where growth has been sluggish in recent months, also improved as consumers refreshed their wardrobes for the new season."
New home registrations in the UK jumped by more than a third in the first quarter of 2025 compared with the same period a year earlier, according to a warranty and insurance provider.
Across the UK, 29,356 new homes were registered to be built in the first quarter of this year, which was a 36% increase on the same quarter in 2024 and 17% more than in the fourth quarter of 2024, the National House Building Council, NHBC said.
The NHBC has a 70%-plus share of the UK warranty market.
Its figures also indicate the stock of new properties in the pipeline because homes are registered with the NHBC before being built.
Within the total, 20,653 new homes registered in the private sector in the first quarter of 2025, marking a 62% jump compared with the first quarter of 2024.
There were also 8,703 new homes registered in the rental and affordable sector in the first quarter of 2025, which was a 2% fall compared with the first quarter of 2024.
Sterling was quoted at USD1.3201 early Tuesday, slightly lower than USD1.3206 at the London equities close on Monday.
The euro traded at USD1.1112 early Tuesday, edging down from USD1.1114 late Monday. Against the yen, the dollar was quoted lower at JPY147.83 versus JPY148.18.
In the US on Monday, Wall Street ended higher, with the Dow Jones Industrial Average up 2.8%, the S&P 500 3.3% higher and the Nasdaq Composite rising 4.4%.
Washington and Beijing's agreement to temporarily reduce tit-for-tat tariffs marks an improvement for trade, but levels remain high and are likely to weigh on economic growth, said a senior Federal Reserve official.
The comments by Governor Adriana Kugler, at a symposium in Ireland, came shortly after the US and China said they would sharply lower tariffs on each other's goods for 90 days while negotiations continued.
With the latest agreement, the US is set to lower its tariffs on Chinese goods from 145% to 30%, while China will reduce its retaliation from 125% to 10%.
"I still expect an increase in prices and a slowdown in the economy," Kugler warned, although she anticipates this will not happen to the same extent as before. All eyes are on whether the 90-day pause will be sustained, she said, adding that things are moving in the right direction for now. In a prepared speech, she also said Monday that "trade policies are evolving and are likely to continue shifting, even as recently as this morning."
"Still, they appear likely to generate significant economic effects even if tariffs stay close to the currently announced levels," she added.
In Asia on Tuesday, the Nikkei 225 index in Tokyo was up 1.7%. In China, the Shanghai Composite rose 0.2%, while the Hang Seng index in Hong Kong fell 1.5%. The S&P/ASX 200 in Sydney closed 0.4% higher.
"While yesterday’s news flow was clearly a net positive, it does yet again speak to the volatile and chaotic nature by which policy continues to be made in the US – the very thing that has been eroding the credibility of its institutions, and haven value of its assets, in recent weeks. Such erratic decision making will likely, once the knee-jerk rally subsides, encourage investors to continue to trim their exposures to the US," commented Pepperstone analyst Michael Brown.
Gold was quoted at USD3,254.50 an ounce early Monday, higher than USD3,236.25 on Tuesday and following a sharp drop from USD3,342.57 on Friday.
Brent oil was trading at USD64.82 a barrel early Tuesday, down from USD65.21 late Monday.
In Tuesday's corporate calendar, full-year results from sales, marketing, and support services provider DCC.
In the economic calendar on Tuesday, UK unemployment, average earnings figures and US inflation data.
By Emily Parsons, Alliance News reporter
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