(Alliance News) - Stock prices in London are set to open higher on Tuesday as markets nudge up ahead of this week's US interest rate decision.
The pound was steady, despite UK Prime Minister Boris Johnson pushing back the final phase of England's lockdown easing to July 19.
Sterling was quoted at USD1.4118 early Tuesday, flat on USD1.4112 at the London equities close on Monday.
More positively, the UK unemployment rate edged down again as data pointed to a continued recovery in the labour market, data showed on Tuesday. The unemployment rate for the three months to April was 4.7%, down from 4.8% for the three months to March.
This labour market recovery appears to have extended into May. The number of payrolled employees has increased for the sixth consecutive month, the ONS said, up by 197,000 in May to 28.5 million.
In early UK company news, AstraZeneca said a study looking at its AZD7442 treatment in post-exposure prevention of symptomatic Covid-19 did not meet its primary endpoint, though Astra noted figures which showed its vaccine holds up well against the Delta variant.
IG says futures indicate the FTSE 100 index of large-caps to open up 29.92 points, or 0.4%, at 7,176.60 on Tuesday. The FTSE 100 closed up 12.62 points, or 0.2%, at 7,146.68 on Monday.
"Some pre-FOMC position shuffling is occurring across asset classes at the moment. Equities continue on their merry way higher, with the S&P 500 and Nasdaq tracing new record highs overnight," said Jeffery Halley, senior market analyst at Oanda.
In the US on Monday, the Dow Jones Industrial Average closed down 0.3%, but the S&P 500 closed up 0.2% and the Nasdaq Composite up 0.7%.
The US Federal Reserve's two-day meeting begins on Tuesday, with the latest interest rate decision due on Wednesday. The central bank will be mulling last week's US inflation print, which accelerated to the highest level since 2008.
"The exception is China markets," Halley noted of equity market activity on Tuesday, "where the PBOC withdrawing liquidity and nuclear nerves have pushed Mainland and Hong Kong markets lower."
In China, the Shanghai Composite was down 0.9%, while the Hang Seng index in Hong Kong was down 0.8%.
Operators of a nuclear power plant in southern China are fixing a "performance issue" at the facility, but the gas emissions carried out to do that are within acceptable limits, its French part-owner said Monday following a US media report of a potential leak.
CNN said the US government has spent the past week assessing a report of a leak at the Taishan Nuclear Power Plant in populous Guangdong province after Framatome, a French firm that partly owns it, warned of an "imminent radiological threat". But one of the unnamed US officials cited by CNN said the administration of President Joe Biden believes the facility is not yet at "crisis level".
In Tokyo on Tuesday, the Nikkei 225 index closed up 1.0%. The S&P/ASX 200 in Sydney ended up 0.9%.
Against the yen, the dollar rose to JPY110.05 versus JPY109.99 as Japan's opposition submitted a no-confidence motion against Prime Minister Yoshihide Suga's cabinet. However, Suga's Liberal Democratic Party and its smaller coalition partner Komeito have a majority in the lower house of parliament and are expected to shoot the vote down on Tuesday.
Drug maker AstraZeneca said a trial studying its long-acting antibody combination to treat those recently exposed to the SARS-CoV-2 virus did not meet its primary endpoint. The primary endpoint was post-exposure prevention of symptomatic Covid-19 with AZD7442 compared to placebo.
The 1,212 trial participants were unvaccinated adults with confirmed exposure to a person with a case of the SARS-CoV-2 virus within the past eight days. AZD7442 reduced the risk of developing symptomatic Covid-19 by a third compared to placebo, which was not statistically significant.
"While this trial did not meet the primary endpoint against symptomatic illness, we are encouraged by the protection seen in the PCR negative participants following treatment with AZD7442. We await results from Provent, our pre-exposure prevention trial and Tackle, our treatment trial in preventing more severe disease, to understand the potential role of AZD7442 in protecting against Covid-19," said Mene Pangalos, executive vice president for BioPharmaceuticals R&D at Astra.
Meanwhile, the company noted new data from Public Health England demonstrating the Astra Covid-19 vaccine offers good protection against the Delta variant. Real world data from PHE, published as a pre-print, showed two doses of Astra's jab is 92% effective against hospitalisation from the Delta variant and showed no deaths among those vaccinated.
The promising Astra vaccine data comes as the UK prime minister has been forced to delay the end of England's coronavirus restrictions by up to four weeks after being warned that ending curbs could lead to thousands of deaths and unbearable pressure on the NHS.
Johnson announced the setback to the final phase of his plan to end the lockdown on Monday, citing concerns over the rapidly spreading Delta variant first identified in India.
Experts feared going ahead with step four on June 21 as planned could lead to hospital admissions on the scale of the first wave of Covid-19 heaping unsustainable pressure on the health service. To avert this, Johnson said during a Downing Street press conference that the end of all legal limits on social contact would be put back to July 19.
In other early UK company news, equipment rental firm Ashtead lifted its dividend as it ended its financial year on a strong note.
Revenue for the financial year that ended April 30 was down 0.4% at GBP5.03 billion from GBP5.05 billion the year before, while pretax profit fell 4.8% to GBP936.0 million from GBP982.8 million.
Ashtead noted that it had returned to growth in the fourth quarter, with rental revenue up 15% on a constant currency basis.
The firm proposed a final dividend of 35 pence, taking the year's total to 42.15p, up 3.7% from 40.65p the year before.
Ashtead said it enters the new financial year with "clear momentum" and is targeting rental revenue growth at constant exchange rates of 6% to 9%. This would compare with 1% for the recently ended year.
"We will invest to drive long-term sustainable growth and returns and strengthen the business. The benefit we derive from the diversity of our products, services and end markets, our investment in technology and ongoing structural change, enhanced by the environmental and social aspects of ESG, enables the board to look to the future with confidence," said Chief Executive Brendan Horgan.
The euro traded at USD1.2133 early Tuesday in London, a touch higher from USD1.2124 late Monday.
Gold was quoted at USD1,868.01 an ounce early Tuesday, up from USD1,863.20 on Monday. Brent oil was trading at USD73.12 a barrel, soft on USD73.28 late Monday.
The economics events calendar on Tuesday has the eurozone trade balance at 1000 BST. In the afternoon, there are the US producer price index and retail sales data at 1330 BST and industrial production at 1415 BST.
By Lucy Heming; lucyheming@alliancenews.com
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