Politics

FTSE 100 tipped to make a stonking start sparked by US stimulus measures

The FTSE 100 is predicted to make a stonking start on Tuesday as stocks worldwide are boosted by US monetary and fiscal stimulus plans, papering over concerns about a second wave of the coronavirus.

Londons blue-chip index has been called 162.5 points or 2.7% higher by traders on the IG spread betting platform.

Overnight, US stocks recovered to finish in the green after the Federal Reserve kicked off a new corporate bond buying programme, with reports also suggesting that the White House is working on a US$1trn infrastructure fund to boost the economy.

The Dow Jones adding 158 points or 0.6%, while the S&P 500 closed up 0.8% and the Nasdaq Composite finished 1.4% higher.

Asian stocks are romping higher on Tuesday, with Japans Nikkei up 4.7%, the Hang Seng rising 3% and the Shanghai Composite up 1.1%.

“The impressive gains in Asia will continue throughout the remainder of the session, with Europe sure to climb aboard as well,” said Jeffrey Halley, market analyst at Oanda.

“The Trump infrastructure plan will turbo-boost any individual companies and sectors, likely to have even a sniff of part of the action.”

Tuesdays economic data focus in the UK will be on Aprils unemployment numbers and Mays claimant count, while across the pond later the spotlight will be on retail sales and industrial production figures.

UK unemployment is expected to rise to around 4.6% after a long while at multi year lows and wage growth to slow below 1.5%, while Mays 5.0K claimant count is predicted to halve to around 400,000.

The most prominent item of company news in the diary is Ashtead Group PLCs (LON:AHT) full-year results, where the US construction market is key.

With more signs that the world economy is heading for an almost unprecedented contraction, such a downturn could also imperil Ashteads dividend growth streak, which has continued since 2005.

Analysts are already predicting a final dividend of 35.8p, which would amount to a cut from last years payout.

Around the markets

Pound up 0.5% to US$1.2671

Oil flat, with a barrel of Brent crude at US$39.77

Gold up 0.4% to US$1,734.80

Significant announcements expected on Tuesday:

Finals: Ashtead Group PLC (LON:AHT), Eckoh PLC (LON:ECK), Braemar Shipping Services PLC (LON:BMS), Checkit PLC (LON:CKT), Tatton Asset Management PLC (LON:TAM), Telecom Plus PLC (LON:TEP)

Interims: Oxford Biodynamics PLC (LON:OBD)

Economic data: UK employment data, US retail sales

Newspaper headlines

BP will slash its dividend, warn analysts

Delay and confusion about finding a reliable antibody test in the UK – FT

High street splurge unlikely anytime soon despite £60bn unspent – Guardian

Tesla to buy cobalt from Glencore for new car plants – FT

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