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London pre-open: Stocks seen higher despite ongoing lockdown concerns

Wed, 14th Oct 2020 07:37

(Sharecast News) - London stocks were set to rise at the open on Wednesday despite ongoing concerns about tougher coronavirus restrictions and doubts about the prospect of more US stimulus.
The FTSE 100 was called to open 18 points higher at 5,987.

CMC Markets analyst Michael Hewson said: "The increasing uncertainty over the future of various leisure and other services businesses in the event of an emergency circuit breaker lockdown being implemented in the next two weeks, saw some heavy declines in travel and leisure stocks yesterday, with pubs, restaurants and airlines all coming under pressure. This uncertainty is unlikely to diminish as the political rhetoric over such a circuit breaker is likely to increase as we head towards the school half term break, which is when such an event could well happen.

"What doesn't appear to be being discussed is the effect such a measure would have on already fragile business models, and where the scientific evidence is that any such measure would work in any other way than push the rise in cases further out into the winter months, and closer to Christmas."

In corporate news, house builder Barratt said it continued to see strong demand for homes after the easing of coronavirus lockdown measures in June with an increase in its sales rate from July 1 to October 11.

The company reported a 24% rise in home completions to 4,032 with total forward sales of 15,135 homes compared with 12,963 last year at a value of £3.64bn versus £3.07bn in 2019. "Our sales rate in the period was 0.87 net private reservations per active outlet per average week, up 20.8% on last year," Barratt said.

Pearson reported a 14% decline in group sales in its first nine months, which it said reflected the continuing impact of Covid-19 and test centre and school closures in its global assessment and international operations, and expected declines in the North American courseware business.

The education publisher did see an accelerated shift to digital in US higher education courseware, however, with digital registrations including ebooks up by 9%, while print and bundle units sold into US colleges was down 32%. ​It said it remained on track to deliver an outturn broadly in line with market expectations for the year.

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