London pre-open: Stocks to rise amid lockdown easing hopes

London stocks were set to rise at the open on Monday amid optimism over lockdown easing as coronavirus death tolls in Europe and the UK continue to decline.

The FTSE 100 was called to open 94 points higher at 5,893.

CMC Markets analyst David Madden said: "Many countries have reopened elements of their economies so traders will be closely watching the situation in relation to the possibility of a second wave of the coronavirus.

"Italy has been one of the worst-hit countries in Europe, but the Covid-19 data posted yesterday was positive. The death rate and the infection rate fell, while the recovery rate increased."

Madden said traders will be closely watching the latest economic reports to see if the economy is at least improving.

"The May reading of the New York Fed manufacturing index was -48.5, but keep in mind the April level was -78.2. China has announced post lockdown data that has shown signs of improvement, so dealers will be wondering if western economies will follow in their footsteps.

"Overnight it was confirmed that Japan entered a technical recession. In the first quarter of 2020, the economy contracted by 3.4% on an annualised basis, and the reading for the final quarter of 2019 was revised to -7.3%. Stock markets in the Far East are showing modest gains, despite the recession news from Japan. Europe indices are anticipated to open higher."

In corporate news, budget carrier Ryanair said coronavirus travel bans would lead to a €200m first quarter loss.

The reported full-year post-tax profits of €1bn, up 13%. Revenue rose 4% in the 12 months to March 31 to €8.5bn.

“The group expects to record a loss of over €200 million in quarter one, with a smaller loss expected in quarter two (peak summer) due to a substantial decline in traffic from Covid-19 groundings,” Ryanair said.

Mitchells & Butlers said the waiver agreed with its lenders to avoid a breach of its financing terms had been extended for three weeks.

The FTSE 250 company announced the waiver to 15 May in mid-April because the closure of its pubs and restaurants during the coronavirus might cause a breach of its financing arrangements.

"Mitchells & Butlers announces today that the temporary waiver it has been granted, as previously announced, against possible technical default due to enforced closure of the business has been extended to 8 June," the company said in a statement.