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London open: Stocks up amid optimism over lockdown easing

By Michele Maatouk

Date: Tuesday 02 Jun 2020

LONDON (ShareCast) - (Sharecast News) - London stocks rose in early trade on Tuesday amid optimism over lockdown easing.
At 0900 BST, the FTSE 100 was up 0.5% at 6,194.83.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "So far, investors remain focused on global business reopening, the fact that the number of new Covid cases remains stable as economies restart operating and of course, the massive fiscal and monetary support from central banks and governments."

The positive tone came despite growing unrest in the US over the killing of George Floyd, as President Trump threatened to send in the army.

CMC Markets analyst Michael Hewson said: "If the violence on US streets continues for much longer US investors might have to cope with a lockdown of a different kind, imposed by the National Guard. This is something that President Trump hinted he might well do if the various states aren't able to contain the outbreaks of violence across US cities."

On home shores, a survey released earlier by Nationwide showed that house prices fell 1.7% in May in the steepest drop since the financial crisis.

The month-on-month decline was the biggest since February 2009 and followed the near shutdown of the property market during the Covid-19 crisis. The annual rate of house-price growth more than halved to 1.8% from 3.7% a month earlier and was well below expectations for a 2.8% drop.

The average house price fell to 218,902 from 222,915 in May even though the government eased restrictions to allow the market to reopen in the middle of the month. Nationwide, the UK's biggest building society, said transactions would be affected for some time with potential buyers wary during what is expected to be a deep recession.

The UK housing market was showing signs of revival in early 2020 after years in the doldrums caused by uncertainty over Brexit. The Covid-19 restrictions forced estate agents to close and barred physical house viewings, effectively closing the market.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the figures suggested weak confidence would lead to further declines.

"The big month-to-month drop ... surely is just the start of a protracted decline over the remainder of this year," Tombs said. "The huge size of the blow from Covid-19 to households' incomes and the deterioration in consumers' confidence suggests that house prices must drop: we look for a 5% decline in prices by the end of Q3."

In equity markets, aerospace and defence giant Rolls-Royce rallied again, having suffered heavy losses last week after a stake sale by AKO Capital and a credit rating downgrade by Standard & Poor's.

Travel related stocks advanced, with cruise operator Carnival, British Airways and Iberia parent IAG and TUI all firmly higher.

Miner Glencore was lifted by an upgrade to 'buy' at Renaissance Capital.

Industrial products distributor Electrocomponents was also in the black even after it deferred its final dividend until it had a clearer view of the coronavirus pandemic's impact as sales fell 14% in the first eight weeks of the current year.

The company said it would look at paying an extra interim dividend. Full year pre-tax profits rose 2.3% to 199.6m.

Private hospital operator Mediclinic was up after it reported a widening of its full-year losses due to impairment charges but noted improving trends in May.

Retirement housebuilder McCarthy and Stone was also trading higher after saying its sales offices and construction sites would start to reopen from the Covid-19 lockdown on 8 June and that fewer of its residents had died than in the wider older population.

On the downside, Tesco was a little lower as it said it is looking for a new chief financial officer after Alan Stewart decided to retire from the supermarket group.

Market Movers

FTSE 100 (UKX) 6,194.83 0.46%
FTSE 250 (MCX) 17,333.43 0.32%
techMARK (TASX) 3,747.40 -0.13%

FTSE 100 - Risers

Rolls-Royce Holdings (RR.) 297.90p 3.98%
Carnival (CCL) 1,166.50p 2.82%
International Consolidated Airlines Group SA (CDI) (IAG) 248.40p 2.64%
Glencore (GLEN) 161.08p 2.62%
BP (BP.) 318.05p 2.27%
Centrica (CNA) 38.83p 2.24%
Compass Group (CPG) 1,222.50p 2.22%
Johnson Matthey (JMAT) 2,134.00p 2.06%
Meggitt (MGGT) 291.80p 1.99%
Royal Dutch Shell 'A' (RDSA) 1,316.00p 1.95%

FTSE 100 - Fallers

Ocado Group (OCDO) 2,178.00p -2.29%
Morrison (Wm) Supermarkets (MRW) 185.40p -1.88%
Persimmon (PSN) 2,346.00p -1.80%
Flutter Entertainment (FLTR) 10,620.00p -1.67%
Hargreaves Lansdown (HL.) 1,806.50p -1.37%
AstraZeneca (AZN) 8,609.00p -1.09%
Pearson (PSON) 496.00p -0.78%
Tesco (TSCO) 230.30p -0.69%
Admiral Group (ADM) 2,281.00p -0.65%
Sainsbury (J) (SBRY) 192.55p -0.59%

FTSE 250 - Risers

TUI AG Reg Shs (DI) (TUI) 480.50p 8.66%
Hammerson (HMSO) 89.30p 8.27%
Electrocomponents (ECM) 667.50p 4.62%
Mediclinic International (MDC) 284.80p 3.79%
Micro Focus International (MCRO) 446.80p 3.71%
Fisher (James) & Sons (FSJ) 1,294.00p 3.52%
McCarthy & Stone (MCS) 74.20p 3.49%
Airtel Africa (AAF) 39.70p 3.39%
Cineworld Group (CINE) 82.24p 3.08%
Euromoney Institutional Investor (ERM) 757.00p 2.99%

FTSE 250 - Fallers

Rank Group (RNK) 153.00p -2.67%
Royal Mail (RMG) 172.65p -2.57%
Caledonia Investments (CLDN) 2,695.00p -2.53%
Watches of Switzerland Group (WOSG) 273.50p -2.32%
Sanne Group (SNN) 645.00p -2.27%
Law Debenture Corp. (LWDB) 496.50p -2.26%
Clarkson (CKN) 2,215.00p -2.21%
Equiniti Group (EQN) 139.00p -1.97%
Avon Rubber (AVON) 3,240.00p -1.82%
BMO Commercial Property Trust Limited (BCPT) 77.30p -1.65%