London pre-open: Stocks to edge lower as traders mull lockdown easing
London stocks were set to edge lower on Tuesday as investors continue to mull the loosening of lockdown restrictions in the UK and abroad.
The FTSE 100 was called to open 12 points lower at 5,927.
CMC Markets analyst David Madden said: “The pound sold off yesterday as dealers felt the UK’s exit strategy from the lockdown will be too slow. Prime Minister Johnson laid out his plans to unwind the lockdown restrictions on Sunday, and traders felt the process would keep the British economy in an economic coma for too long, so the pound came under pressure.
“In light of what is going on in Germany and South Korea, a gradual loosening of the restrictions might not be a bad thing in the near term as far as the health situation is concerned.”
Chancellor Rishi Sunak is expected to announce later in the day that the furlough scheme will be extended to September, but cut to 60% of earnings from 80%.
In corporate news, Morrisons kept its dividend options on hold as the supermarket group reported an increase in like-for-like sales for the first quarter fuelled by the Covid-19 crisis.
Group sales at outlets open a year or more, excluding fuel, rose 5.7% after three straight quarters of declines. Including fuel, like-for-like sales fell 3.9%, Morrisons said in a trading update.
The FTSE 100 company said it was keeping options for distributing cash under review after deferring a planned special final dividend in March.
Morrisons said the outlook was very uncertain but that its best guess was that Covid-19 costs would be broadly offset by savings on business rates.
Property developer Land Securities pulled its final dividend as full year losses widened and asset values fell.
The company posted a pre-tax loss of £837m compared with a loss of £123m a year ago while its asset valuation was down 8% to £1.2bn, due to an already tough trading environment exacerbated by the coronavirus pandemic and associated retail shutdowns.
“While it is too early to predict outcomes with any certainty, it seems prudent to plan for more business failures and higher vacancy rates across our portfolio, in particular leisure and retail, and we don't expect to see the economy recover to pre-Covid-19 levels before 2022 at the earliest,” the company said.