London pre-open: Stocks seen muted; retail sales in focus
London stocks were set for a muted open on Tuesday following uninspiring cues from the US and Asia.
The FTSE 100 was expected to open two points higher at 7,302.
CMC Markets analyst Michael Hewson said: "Monday’s market reaction to Emmanuel Macron’s win in the French Presidential election turned out to be a massive anti-climax, as after opening higher, both equity markets and the euro were unable to build on the gains of the last two weeks, rolling over to finish the day lower, in a classic buy the rumour, sell the news type of fashion.
"Having seen off Marine Le Pen, for at least another five years anyway, investors are now turning their attention to the size of the task ahead of the new President, despite his landslide win."
Investors will be digesting the latest figures from the British Retail Consortium, with its measure of like-for-like sales rising 5.6% in April from a year earlier, up from a 1% drop in March and better than expectations of a 0.5% increase. This marked the strongest reading since April 2006.
Pantheon Macroeconomics said: "April’s BRC figures are very strong, even after accounting for the boost to the year-over-year growth rate from the later timing of Easter this year compared to last. Indeed, like-for-like sales grew at the fastest rate for 11 years, despite there being five other occasions during that period when Easter occurred in the latest month but didn’t in the same month a year ago."
In corporate news, William Hill cleared the first quarterly fence, with growth in wagering and revenue across all four of the bookmaker's divisions, although margins tightened. As a group, net revenue in the 17 weeks to 25 April rose 9%, which was in line with market expectations.
Builders merchant Grafton said revenue for the first four months of the year was up 7.7% to £851m as favourable conditions from the end of 2016 continued combined with the benefits of exposure to multiple markets.
"The group has had a good start to the year and the outlook is positive. We expect a continuation of the favourable trends in the Irish and Netherlands businesses. In view of recent economic and political developments, we are more cautious about the prospects for the UK however we have a good portfolio of businesses with strong market positions and we look to the future with confidence,” Grafton said.
Micro Focus International updated the market on both its and HP Enterprise Software’s trading for the year to 30 April on Tuesday, together with an update on the merger between the two businesses as first announced on 7 September last year.
The FTSE 100 company reiterated its expectations for revenues to fall within the range of flat to -2% for the year on a proforma constant currency basis, adding that HPE Software’s revenue was down 10% year-on-year in the quarter to 30 April.