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(Alliance News) - London's FTSE 100 is called higher on Tuesday following a bank holiday-lengthened weekend, as Nato members are expected to raise defence spending to 5% of output.
"We need this, because otherwise we will never, ever achieve the capability goals we need to achieve," Nato Secretary General Mark Rutte told the Nato Parliamentary Assembly in Dayton, Ohio, ahead of the body's June summit.
Meanwhile, the EU reports progress in trade talks with the US, following President Donald Trump's extension of the deadline for his planned 50% tariffs on EU goods to July 9.
In early corporate news, Bodycote reports a decline in revenue in the first four months of 2025, while Inspired announces a potential takeover offer from HGGC.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 0.1% at 8,722.47
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Hang Seng: up 0.4% at 23,364.20
Nikkei 225: closed up 0.6% at 37,764.08
S&P/ASX 200: closed up 0.5% at 8,407.60
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US markets were shut for Memorial Day on Monday.
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US 10-year Treasury yield: 4.46% (4.51%)
US 30-year Treasury yield: 5.00% (5.04%)
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EUR: up at USD1.1384 (USD1.1348)
GBP: up at USD1.3564 (USD1.3509)
USD: up at JPY143.14 (JPY142.70)
Gold: down at USD3,317.68 per ounce (USD3,356.90)
(Brent): down at USD64.20 a barrel (USD64.71)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
10:00 BST eurozone consumer confidence
11:00 BST UK CBI distributive trades
13:30 BST US durable goods orders
13:55 BST US Redbook index
14:00 BST US S&P/Case-Shiller home price index
14:00 BST US house price index
15:00 BST US Conference Board consumer confidence
15:30 BST US Dallas Fed manufacturing index
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UK shop prices deflation was unchanged this month, but food inflation increased, data published by the British Retail Consortium revealed. Shop prices declined by 0.1% on an annual basis in May, the BRC said, the same pace of decline as in April. Conversely, the food inflation rate was 2.8% on-year, accelerating from 2.6% in April. Fresh food price inflation rose to 2.4% on-year in May, suddenly accelerating from growth of 1.8% in April. Ambient food inflation, however, eased to 3.3% on-year from 3.7%.
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Resident doctors in England, formerly known as junior doctors, have started receiving ballots for renewed industrial action following criticism of the government's recent pay rise offer. Ministers announced last week that most doctors would receive a 4% pay rise following the latest review of public sector pay, with resident doctors to receive an extra GBP750 on top of the uplift. The British Medical Association, BMA, the union representing doctors, said the pay rise does not go far enough in restoring historical pay freezes. Resident doctors in England starting receiving ballots for industrial action on Tuesday, the BMA said. The ballot closes on July 7, and if doctors vote for action then a mandate would last between July and January next year. Co-chairs of the resident doctors committee urged doctors to vote for strike action, but said the door remains open for the government to come through with a solution.
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Southeast Asian leaders are looking to insulate their trade-dependent economies from geopolitical uncertainty, in particular US tariffs, as they hold talks with Chinese Premier Li Qiang and Gulf state dignitaries in Kuala Lumpur on Tuesday. US President Donald Trump's slew of levies in April, though he subsequently instigated a 90-day pause for most, has spurred the Association of Southeast Asian Nations, ASEAN, to accelerate efforts to diversify its trading networks. "A transition in the geopolitical order is underway," Malaysian Prime Minister Anwar Ibrahim said in written remarks Monday. After a lavish gala dinner the night before, Tuesday sees the inaugural summit between ASEAN, China and the Gulf Cooperation Council, GCC, – a regional bloc made up of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
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The Kremlin suggested that US President Donald Trump's harsh criticism of President Vladimir Putin is down to "emotional overload," amid uncertainty over the status of negotiations to try and end the war in Ukraine. The prospect of negotiations is "connected, of course, with emotional overload of absolutely everyone and with emotional reactions," Kremlin spokesman Dmitry Peskov was quoted as saying by the Russian state news agency TASS. He rejected Trump's criticism of the mass bombardment of Ukraine over the past three nights, arguing that Putin was "making the decisions that are necessary to ensure the security of our country."
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The Kremlin said that any Western decision to lift range limits on arms delivered to Ukraine would be "dangerous", after Germany announced that Kyiv's allies were no longer imposing restrictions. "If these decisions have indeed been made, they are completely at odds with our aspirations for a political [peace] settlement... These are quite dangerous decisions, if they have been made," Kremlin spokesman Dmitry Peskov told Russian journalist Alexander Yunashev.
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German Foreign Minister Johann Wadephul is to travel to the US on Tuesday for an inaugural visit. Wadephul was invited by his counterpart Marco Rubio for a meeting in Washington on Wednesday, the Foreign Office said in Berlin. The topics to be discussed are US-German relations, further support for Ukraine, trans-Atlantic security and defence policy, as well as the situation in the Middle East. Trade relations between the US and the EU are also on the agenda amid a smouldering conflict over the high tariffs announced by President Trump.
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Nato members are expected to agree to raise their defence expenditure to 5% of economic output, according to Secretary General Mark Rutte. A new target is set to be agreed at the Nato summit in the Dutch city of The Hague in June. "We need this, because otherwise we will never, ever achieve the capability goals we need to achieve," Rutte told the Nato Parliamentary Assembly in Dayton, Ohio. Rutte said he expects that a higher target for defence spending will be agreed at the summit - "a total of 5%." According to the Nato head, of that, significantly more than 3% would go towards traditional defence spending - internal documents mention 3.5%. The rest could go towards defence-related spending, such as military infrastructure, including railway lines, tank-compatible bridges and expanded ports.
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The EU remains committed to reaching a trade agreement with the US, Trade Commissioner Maros Sefcovic said following calls with US officials on Monday. Sefcovic, in a post on the social media platform X, said that he had "good calls" with US Secretary of Commerce Howard Lutnick and Trade Representative Jamieson Greer, adding that the EU Commission will "stay in constant contact" with the US.
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Putin intends to block the services of Western IT companies that have left Russia. His comments were made during a meeting with Russian entrepreneurs on Monday. "They must be restricted," Putin said, according to a statement published by the Kremlin. The West wants to strangle Russia, so it must retaliate in kind, the Russian leader added. He also promised protective measures for other industries. Russians continue to rely heavily on platforms from Zoom Video Communications and Microsoft.
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Holidaymakers in countries hit hardest by President Donald Trump's trade tariffs are shunning the US for their trips abroad, while UK and US travellers are increasingly choosing to staycation amid economic worries, according to hotel search site Trivago. Johannes Thomas, chief executive of Trivago, told the PA news agency the group was seeing double-digit declines in bookings to the US from travellers in Canada, Mexico and Japan. Demand among Germans for trips to the US is also down heavily, with a single-digit decline in bookings for accommodation in America, although the firm has not seen a significant change in demand from Britons travelling to the US. Thomas added that US holidaymakers are also paring back their holiday spend in the face of economic uncertainty caused by Trump's move to unleash higher tariffs on countries across the world.
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BROKER RATING CHANGES
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Goldman Sachs cuts IMI to 'neutral' - price target 2,120 pence
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Peel Hunt raises Jupiter Fund Management to 'add' - price target 90 pence
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Berenberg raises Central Asia Metals to 'buy' (hold) - price target 230 (190) pence
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COMPANIES - FTSE 100
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Whitbread taps Severn Trent Chair Christine Hodgson to join its board, also as chair, with effect on September 1. Hodgson will replace Adam Crozier who will step down as chair and retire from the board on the same date, following seven years in the role. "It's an exciting time to be joining, as the company continues to deliver on its five-year plan, and Premier Inn's expansion in Germany gathers pace," says Hodgson. "I look forward to leading the board and working alongside the talented teams as we unlock the group's full potential."
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DCC launches a share buyback programme for up to GBP100 million, as part of the firm's plans to return GBP800 million in capital from the sale of its Healthcare arm, which was agreed earlier in May at a total enterprise value of GBP1.05 billion. The buyback will end no later than September 30.
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AstraZeneca reports its Imfinzi, or durvalumab, therapy has been recommended for approval in the EU for the treatment of adult patients with resectable muscle-invasive bladder cancer in combination with gemcitabine and cisplatin as neoadjuvant treatment, followed by Imfinzi as monotherapy adjuvant treatment after radical cystectomy, a surgery to remove the bladder. The Committee for Medicinal Products for Human Use of the European Medicines Agency based its positive opinion on results from the Niagara phase 3 trial, in which the Imfinzi-based perioperative regimen demonstrated a 32% reduction in the risk of disease progression or recurrence compared to the current standard of care. "The Imfinzi-based perioperative regimen in the Niagara phase 3 trial enabled survival of more than 80 per cent of patients at two years after treatment. This supports our strategy of moving our innovative medicines into the earlier stages of disease where the opportunity for treatment with curative intent is greatest," says Susan Galbraith, AstraZeneca's executive vice president, Oncology Haematology research and development. "If approved, this novel approach will become a much-needed new treatment option for patients in Europe and could become the new standard of care in this setting." Imfinzi is currently approved in the US and other countries based on the Niagara results. Regulatory applications are currently under review in Japan and elsewhere.
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COMPANIES - FTSE 250
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Bodycote reports a 6% on-year decline in group revenue during the first four months of 2025, reflecting a strong prior year comparator plus a 1% headwind from lower energy surcharges. The firm says it is closely monitoring ongoing global trade discussions, but notes it has no material direct exposure to cross-border tariffs. Bodycote expects full-year results in line with market expectations, citing a company-compiled consensus for GBP718 million in revenue and GBP121.5 million in operating profit. This would be down 5.2% from GBP757.1 million in revenue in 2024, but represents a jump from GBP37.9 million in operating profit. Profit had been hit by a one-off GBP78.3 million exceptional items charge in 2024.
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Hochschild Mining Chief Operating Officer Rodrigo Nunes steps down with immediate effect, for an undisclosed reason, following his 2023 appointment. Chief Executive Officer Eduardo Landin has assumed responsibility for the firm's operations on an interim basis while the company completes the process of recruiting a new COO. As part of an ongoing reorganisation of Hochschild's Brazilian business, Hochschild notes that a number of interim management appointments have been made.
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Elementis agrees and completes the sale of its Talc business to global talc manufacturer IMI Fabi for an enterprise value of USD121 million. Net cash proceeds after expenses are around USD55 million. The disposal follows the firm's strategic review of the Talc business in August 2024, and will improve Elementis' adjusted operating profit margin by around 240 basis points. The sale will also accelerate the delivery of the group's 2026 financial targets, Elementis added. As a result, Elementis intends to return USD50 million to shareholders via a share buyback programme, which it expects to launch "as soon as possible". The firm left its full-year outlook and progressive dividend policy unchanged.
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OTHER COMPANIES
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Inspired announces it is in talks regarding a potential takeover offer from HGGC for 81 pence in cash per Inspired share. Inspired confirms that HGCC was the unnamed third party referred to in its release last week, which saw Inspired's rejection of Regent Acquisitions' "wholly inadequate" offer for 68.50p per Inspired share. The Inspired board says it would be minded to recommend the HGGC offer to shareholders, should a firm offer be made. HGCC says it intends to reduce the terms of its offer by the amount of the final dividend proposed by Inspired on March 31, if paid. As a result, Inspired says it would withdraw its final dividend upon receipt of a firm offer. The firm notes there is no certainty that an offer will be made, and that a further announcement will be made "when appropriate". Inspired shareholders are urged to take no action.
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By Emily Parsons, Alliance News reporter
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