1st Jul 2025 09:02
(Alliance News) - London stocks opened in the green on Tuesday, as a vote looms on Labour's proposed welfare cuts and a data reading shows average UK house prices slipped in June.
The FTSE 100 index opened up 12.98 points, 0.2%, at 8,773.94. The FTSE 250 was up 48.46 points, 0.2%, at 21,674.72, and the AIM All-Share was up 3.55 points, 0.5%, at 774.20.
The Cboe UK 100 was slightly lower at 874.49, the Cboe UK 250 was up 0.2% at 19,191.60, and the Cboe Small Companies was marginally down at 17,558.70.
The average UK house price dipped by 0.8% month-on-month in June, according to an index. Across the UK, the typical property value in June was GBP271,619, Nationwide Building Society said.
The annual rate of house price growth slowed, to 2.1% in June, from 3.5% in May.
Robert Gardner, Nationwide's chief economist, said: "The softening in price growth may reflect weaker demand following the increase in stamp duty at the start of April.
"Nevertheless, we still expect activity to pick up as the summer progresses, despite ongoing economic uncertainties in the global economy, since underlying conditions for potential home buyers in the UK remain supportive."
Nationwide said its regional house price figures, which are produced quarterly, indicate that the majority of areas have seen a modest slowdown in annual house price growth.
Meanwhile, UK Prime Minister Keir Starmer continues to face the prospect of a major rebellion over his welfare cuts despite making concessions to disgruntled Labour MPs.
Ministers hope a partial U-turn will be enough to win over Labour rebels when MPs vote on welfare changes on Tuesday.
The concessions included protecting people claiming personal independence payment, Pip, from changes due to come into effect in November 2026, and rowing back plans to cut the health-related element of universal credit.
But backbench anger has continued to simmer, with a statement from Work & Pensions Secretary Liz Kendall laying out the concessions on Monday receiving a negative response.
Asked whether he was "confident" that the concessions had done enough to secure passage of the Universal Credit and Personal Independent Payment Bill, disabilities minister Stephen Timms would only tell Sky News: "I certainly hope it passes."
In European equities on Tuesday, the CAC 40 in Paris declined 0.2%, while the DAX 40 in Frankfurt fell 0.1%.
The pound was quoted higher at USD1.3754 early on Tuesday in London, compared to USD1.3701 at the equities close on Monday. The euro also stood higher, at USD1.1782 against USD1.1747. Against the yen, the dollar was trading lower at JPY143.25 compared to JPY144.31.
Mpac Group slid 28% at Tuesday's market open.
The high-speed packaging and automation solutions firm said revenue in the first six months of 2025 was in line with its expectations, despite growing headwinds from US tariffs.
Its closing order book for the Original Equipment unit on June 30 is anticipated at around GBP90.0 million, against GBP118.5 million at the end of December. This will provide "materially lower than anticipated cover for [second-half] revenue," Mpac said.
Mpac will close its facility in Cleveland, Ohio, and reduce capacity at its facility in Mississauga, Canada, to optimise its US cost base amid "current slower market conditions" in the region. No impact on customers is anticipated, though the restructuring will incur non-cash impairment charges of around GBP11.5 million.
Kitwave faded 27%.
The food wholesaler said pretax profit was GBP5.6 million for the six months that ended April 30, falling 19% from GBP6.9 million the year before. Revenue, on the other hand, grew 27% to GBP376.2 million from GBP297.0 million.
The decline was largely driven by distribution expenses increasing 42% to GBP39.6 million from GBP27.9 million and administrative expenses rising 33% to GBP35.4 million from GBP26.6 million. Kitwave declared an interim dividend of 4.00 pence per share, up 3.9% on-year from 3.85p.
Looking ahead, Kitwave said it no longer believes it will be able to offset the increases to employer national insurance, which will increase its costs during the second half and beyond.
The firm now expects to report adjusted operating profit between GBP38.0 million and GBP40.5 million for the year ending October 31. At best, this would be a 19% growth from GBP34.0 million in financial 2024.
At the other end, National Grid was among the FTSE 100's leading risers, up 1.8%.
The electricity and gas provider, alongside energy provider peer SSE, responded to Ofgem's approval of an initial GBP24 billion investment programme for the operation and maintenance of gas networks in Britain.
The investment in UK energy will rise to around four times the current spending levels, will allow for 80 transmission projects and all associated works across the country to be completed within five years, says Ofgem, as well as significantly increasing the grid's capacity.
SSEN Transmission, however, said "based on an initial assessment, Ofgem's draft determination does not go far enough to deliver the investible, financeable and ambitious framework required to unlock the unprecedented levels of investment needed to deliver lower and more stable bills".
The subsidiary of SSE adds that "the proposed incentive regime is at an early stage and therefore requires further development to give sufficient confidence this will be a balanced and investable package that incentivises strong performance and delivers for consumers".
National Grid said it is "pleased to see Ofgem continuing to recognise the need for significant levels of investment in networks", and continues to expect to invest around GBP60 billion over the five years to March 2029. National Grid will now review the draft determination to assess "whether it delivers an investable overall financial package".
SSE rose 1.1%.
In Asia on Tuesday, the Nikkei 225 index in Tokyo faded 1.2%, while in China, the Shanghai Composite improved 0.4%. The S&P/ASX 200 in Sydney closed slightly lower.
Financial markets in Hong Kong were closed for Special Administrative Region Establishment Day.
In the US on Monday, Wall Street ended in the green, with the Dow Jones Industrial Average 0.6% higher, the S&P 500 up 0.5% and the Nasdaq Composite also up 0.5%.
"There’s a clear mismatch between how markets are positioned and the risks that remain on the table," commented Swissquote analyst Ipek Ozkardeskaya.
"Trade tensions, geopolitical uncertainty, the ballooning US debt burden, the possibility that the Fed might not be able to cut rates, signs of economic slowdown, and even a potential re-acceleration in inflation—none of these risks have disappeared. They've simply been pushed aside, priced in and out over recent months, but they persist."
US senators were in a marathon session of amendment votes on Monday as Republicans sought to pass President Trump's flagship spending bill.
Senators are divided over provisions that would strip around USD1 trillion in subsidised health care from millions of the poorest Americans and add more than USD3.3 trillion to the nation's budget deficits over a decade.
Trump wants to have the package on his desk by the time Independence Day festivities begin on Friday, however, progress in the Senate slowed and continued into Tuesday morning as lawmakers proposed unlimited amendments in the so-called "vote-a-rama" session.
The yield on the US 10-year Treasury was quoted at 4.19%, narrowing from 4.27%. The yield on the US 30-year Treasury was quoted at 4.74%, narrowing from 4.82%.
Brent oil was quoted down at USD66.36 a barrel early in London on Tuesday from USD66.42 late Monday.
Gold was quoted higher at USD3,337.35 an ounce against USD3,286.04.
Still to come on Tuesday's economic calendar, a slew of manufacturing PMIs including releases in the UK, eurozone and US plus eurozone inflation figures.
By Emily Parsons, Alliance News reporter
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