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(Alliance News) - Stocks in London are set to open higher on Tuesday following a strong session on Wall Street overnight.
In early UK company news, SSE has agreed the GBP995 million sale of its 50% interest in two energy-from-waste ventures and Sabre Insurance said it expects to pay an "attractive" full-year dividend.
Meanwhile, figures from the Office for National Statistics showed the UK unemployment rate hit 4.5% in the three months to August.
IG says futures indicate the FTSE 100 index of large-caps to open 22.52 points higher at 6,023.90 on Tuesday. The FTSE 100 closed down 5.27 points, or 0.3%, at 6,001.38 on Monday.
London stocks are set to shake off news that Johnson & Johnson has temporarily halted its Covid-19 vaccine trial because one of its participants had become sick.
In the US on Monday, Wall Street ended in the green, with the Dow Jones Industrial Average closing up 0.9%, the S&P 500 up 1.6% and Nasdaq Composite closing 2.6% higher.
"Yesterday's move higher in US markets appears to be predicated on the belief that whoever wins in next month's presidential election, there will be a sizeable fiscal stimulus package coming down the pipe, with the only unknown being around the size of any deal," said Michael Hewson, chief market analyst at CMC Markets.
The mood was more cautious in Asia on Tuesday. The Japanese Nikkei 225 index closed up 0.2%. In China, the Shanghai Composite is flat, while the stock market in Hong Kong was closed because of a typhoon.
China's imports expanded by more than expected in September, reducing the nation's trade surplus, official data showed.
China's trade balance for September came in at positive CNY257.68 billion, about USD38.19 billion, versus CNY416.59 billion last month.
Exports spiked 8.7% on year before in September, the Customs Administration said. Imports, which collapsed in May but have since improved, jumped 12% – much stronger than the 1.3% contraction tipped by market analysts according to the FXStreet.
In early UK company news, SSE said it has agreed the sale of its 50% share in energy-from-waste ventures Multifuel Energy and Multifuel Energy 2 for just shy of GBP1 billion.
The sale is to European Diversified Infrastructure Fund III, an infrastructure fund managed by First Sentier Investors, for a total cash consideration of GBP995 million.
MEL1 and MEL2 are joint ventures between SSE and Wheelabrator Technologies, consisting of the operational Ferrybridge Multifuel 1 and Ferrybridge Multifuel 2 facilities, as well as the Skelton Grange Multifuel development project, all in west Yorkshire. SSE said it in June identified its interests in MEL1 and MEL2 as an "early priority" for sale.
The deal is expected to complete by late 2020 subject to European antitrust approval.
"This sale marks a major step in our plans to secure at least GBP2 billion from disposals by autumn 2021, with just over GBP1.4 billion now delivered. While these multifuel assets have been successful ventures for SSE, they are non-core investments, and we are pleased to have agreed a sale that delivers significant value for shareholders while sharpening our strategic focus on our core low-carbon businesses," said Finance Director Gregor Alexander.
Sabre Insurance said its year-to-date performance has been in line with expectations, and it anticipates paying an "attractive" payout.
The motor insurance provider continued to perform well throughout the pandemic and related disruption, noting that temporary lockdown-driven price reductions "fully backed out" as traffic and claim levels normalised.
Gross written premiums picked up in the third quarter, the FTSE 250 constituent said, resulting in the first nine months of the year ending 9% lower year-on-year at GBP139.2 million - having been down 14% in the first half.
Sabre expects to deliver a 2020 combined ratio result "close" to its long-term mid-70%'s target.
"The performance in the first nine months of the year has been in line with expectations. Policy volumes are currently better than anticipated given the rate increases implemented, with high average premiums being achieved," the company said, adding it expects to pay an "attractive" dividend for the full-year.
Gold was quoted at USD1,918.30 an ounce early Tuesday, lower than USD1,921.20 on Monday. Brent oil was trading at USD42.12 a barrel, higher than USD41.64 late Monday.
Sterling was quoted at USD1.3054 early Tuesday, lower than USD1.3070 at the London equities close on Monday.
The UK unemployment rate increased in August, figures showed Tuesday morning, with the Office for National Statistics noting that there are still nearly 700,000 fewer people in work compared to March.
The UK unemployment rate was 4.5% for the June to August period. Consensus, according to FXStreet, had seen the jobless rate holding steady at the revised 4.3% seen for the May to July period.
Growth in average total pay - which includes bonuses - for the three months was unchanged from a year ago, while regular pay - which strips out bonuses - grew 0.8%.
For the period, the ONS said estimates show 32.6 million people over the age of 16 in work, being 102,000 fewer than a year before and 153,000 below the previous quarter.
Early numbers for September suggest there is "little change" in the number of payroll employees in the UK, the ONS said. While this is up 20,000 compared with August, the number of employees has fallen by 673,000 since March.
In other UK news, people facing the toughest new coronavirus restrictions in England could see "significantly" deeper restrictions, the chief medical officer has said.
Chris Whitty said that the flexibility within the new three-tier system of alert levels for England could see "additional" measures guided by local health leaders. Whitty also said people in areas of England not subject to local lockdown measures should not be lulled into a false sense of security.
New UK restrictions banning different households from mixing indoors could be imposed on London as early as this week to prevent rising coronavirus levels, Mayor Sadiq Khan has warned.
The city is expected to be initially placed on "medium" in the new three-tier system of local alerts for England when they come into force on Wednesday.
This would put London with most of the nation at the lowest end of the scale, meaning no new restrictions would be imposed immediately and the rule of six and the 2200 BST curfew staying in place. But the London mayor warned that the capital could be moved upwards "very quickly – potentially even this week" after UK Prime Minister Boris Johnson set out his plans on Monday.
The euro traded at USD1.1799 early Tuesday, down on USD1.1807 late Monday. Against the yen, the dollar edged up to JPY105.37 versus JPY105.28.
In the international economics calendar Tuesday, there is a US consumer price index reading at 1330 BST.
By Lucy Heming; lucyheming@alliancenews.com
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