(Alliance News) - Stocks in London are set to extend gains on Tuesday as markets continue to focus on the lifting of lockdowns, shaking off another day of protests in the US.
In early UK company news, Tesco said its chief financial officer will be leaving next year, Electrocomponents reported a hit to demand in April and May and deferred a decision on its final dividend, and Card Factory saw a full-year profit fall but good online trading in recent weeks with stores closed due to Covid-19.
IG says futures indicate the FTSE 100 index of large-caps to open 20.28 points higher at 6,186.70 on Tuesday. The FTSE 100 index closed up 89.92 points, or 1.5%, at 6,166.42 on Monday.
"Risk assets continue to shrug off political angst while reacting positively to coronavirus lockdowns being eased across the globe," said Stephen Innes, chief global markets strategist at AxiCorp.
Unrest continued in the US on Monday, with President Donald Trump vowing to order a military crackdown on once-in-a-generation violent protests gripping the country.
The dramatic escalation came a week after the death in Minneapolis of George Floyd, an unarmed black man who was killed when a white police officer knelt on his neck, leading to the worst civil unrest in decades in New York, Los Angeles and dozens of other American cities.
"I am dispatching thousands and thousands of heavily armed soldiers, military personnel and law enforcement officers to stop the rioting, looting, vandalism, assaults and the wanton destruction of property," Trump said.
He slammed the previous night's unrest in Washington as a "total disgrace" and called on governors to "dominate the streets".
Despite the president's rhetoric, Monday's protests appeared largely peaceful in major cities, though some looting was reported in New York and Los Angeles.
In the US on Monday, Wall Street ended in the green, with the Dow Jones Industrial Average ending up 0.4%, the S&P 500 also up 0.4% and Nasdaq Composite closing 0.7% higher.
Stocks rose in Asia overnight as markets focus on the lifting of Covid-19 lockdowns around the globe.
Schools, swimming pools, pubs and tourist sites have begun to throw open their doors again in Europe as the continent continues easing lockdowns despite the threat of a second wave of infections.
The pandemic has now killed more than 377,000 people and infected at least 6.3 million since erupting in China in late 2019.
Bars have started to serve again in Finland and Norway – with social distancing restrictions or shortened hours in place – while some schools in Britain and Greece opened their doors. France registered 31 deaths over the last 24 hours, and on Tuesday is set to reopen cafes, restaurants and bistros, closed since its lockdown began in mid-March.
Pupils wearing face masks returned to school in Singapore on Tuesday and some workplaces re-opened as coronavirus restrictions were eased in the hard-hit city-state.
In Asia on Tuesday, the Japanese Nikkei 225 index ended up 1.2%. In China, the Shanghai Composite is up 0.1%, while the Hang Seng index in Hong Kong is up 0.6%. Â
In early UK company news, Tesco said Chief Financial Officer Alan Stewart has decided to retire and will leave the grocer on April 30, 2021.
He joined Tesco in 2014. The board will now conduct a search both internally and externally to identify a successor, the supermarket chain said.
McCarthy & Stone said it has seen fewer cases of Covid-19 within its retirement communities than the general population of over-65s in the UK, as it phases the restart of work.
The housebuilder said it has taken a "gradual and measured approach" to the re-mobilisation of both sales and build, which are scheduled to commence in phases from Monday. Initial focus is on restarting sales activities on already completed developments, as McCarthy & Stone currently has 1,350 units of available finished stock.
The firm added that it has secured access to the Covid Corporate Financing Facility and has put in place a GBP300 million commercial paper programme under the scheme. This will be used to provide additional liquidity, should it be needed.
Electrocomponents said it delivered a strong performance in its recently-ended financial year, with both sales and profit up, though demand has been hit in recent weeks by Covid-19.
Revenue rose 3.7% to GBP1.95 billion in the year to March 31, with like-for-like sales up 2.2%. The firm estimated that lockdowns in March knocked one percentage point off full-year like-for-like revenue growth.
Pretax profit increased 2.3% to GBP199.6 million.
On recent trading, Electrocomponents said like-for-like revenue was down 14% in the first eight weeks of the new financial year, though the rate of decline moderated slightly during May as lockdowns began to ease in some of its key markets.
The drop through impact of lost revenue to adjusted operating profit is typically in the mid-thirties before mitigating actions, the electronics distributor said.
"Electrocomponents delivered a strong performance in the year ended 31 March 2020 against an uncertain market backdrop and the impacts of the Covid-19 pandemic which started to impact trading volumes towards the end of the year," said Chief Executive Lindsley Ruth.
"We are taking tactical action to protect profit and conserve cash, while also accelerating key strategic initiatives to drive scale and efficiency to ensure we come out of this crisis strongly and well positioned for long-term value creation," Ruth added.
Electrocomponents has deferred its final dividend decision until it has "greater visibility". At the half-year, it will review making an additional interim dividend for 2020.
Card Factory reported a fall in full-year profit, but said online trading during the Covid-19 lockdown has been strong.
Revenue for the year ended January 31 rose 3.6% to GBP451.5 million, but like-for-like sales dipped 0.5% and pretax profit fell 4.4% to GBP65.2 million.
The like-for-like sales fall reflected weak consumer confidence and high street footfall decline in the second half, the firm said.
Turning to Covid-19, the greeting cards retailer said online trading has been strong with cardfactory.co.uk like-for-likes since lockdown up four-fold and more than doubling in the year-to-date. It is planning to open 10% of stores around June 15.
"Before the impact of Covid-19, we had made a satisfactory start to the year. In the first major season of the year, Valentine's Day, we achieved our fourth consecutive year of record sales growth in both volume and value. However, the Covid-19 pandemic has impacted trading and, given the uncertain economic backdrop, we do not think it is appropriate to provide financial guidance for FY21," said Card Factory.
The economic events calendar on Tuesday has UK mortgage approvals at 0930 BST.
Sterling was quoted at USD1.2512 early Tuesday, higher than USD1.2470 at the London equities close on Monday. The euro traded at USD1.1126 early Tuesday, flat on USD1.1125 late Monday.
Against the yen, the dollar was quoted at JPY107.75 versus JPY107.60.
Gold was quoted at USD1,737.45 an ounce early Tuesday, higher than USD1,734.85 on Monday. Brent oil was trading at USD38.64 a barrel on Tuesday, up from USD37.60 late Monday.
By Lucy Heming; lucyheming@alliancenews.com
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