London pre-open: Stocks seen steady after Monday's slump
By Michele Maatouk
Date: Tuesday 20 Jul 2021
(Sharecast News) - London stocks were set for a steady open on Tuesday following heavy losses in the previous session on the back of Covid concerns.
The FTSE 100 was called to open unchanged at 6,844.
CMC Markets analyst Michael Hewson said: "Global markets sank into a sea of red yesterday, thumped by concerns that rising virus cases would prompt a slowdown in the global recovery story.
"It wasn't just a localised sell-off, all major indexes got clobbered, as did commodities, with the FTSE 100 posting its biggest one day fall since May and closing at a three-month low. The German DAX didn't fare much better falling to a two-month low less than a week after posting a new record high.
"US markets also fell sharply with the Dow posting its worst fall since last October, while the S&P500 and Nasdaq also finished the day lower.
"As we look ahead to today's European open, expectations are for an unchanged start, even as markets in Asia saw another negative session, as investors weigh up the possibility that we see further weakness as markets reassess whether this is as good as it gets, when it comes down to the global recovery story, or whether the path out is likely to be much longer than was thought to be the case back in March, when optimism was probably at its highest."
In corporate news, budget airline easyJet said it had reduced cash burn amid continuing Covid restrictions as it reported a £318m third quarter loss.
The loss for the three months to June 30 compared with a loss of £346.8m last year. EasyJet said cash burn came in at £55m a week while revenue rose to £212.9m from £7.2m in 2020.
It added that it planned to fly up to 60% of 2019 fourth quarter capacity in the next three months.
Elsewhere, Apollo Global Management is in talks with Fortress Investment Group to join its bid for Morrisons and said it would not make an offer for the supermarket group on its own.
The US private equity group said on 5 July it was considering a bid after Morrisons' board recommended a £6.3bn offer from Fortress, a group of investors led by Softbank. Bidding was triggered by a £5.5bn proposal from rival US buyout firm Clayton, Dubilier & Rice.
Apollo said it was in discussions "which may result in funds managed or advised by Apollo forming part of the investment group led by Fortress for the purposes of the Fortress offer. As a consequence of these discussions, Apollo confirms that it does not intend to make an offer for Morrisons other than as part of the Fortress offer."
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