London pre-open: Stocks seen higher on positive US data
By Michele Maatouk
Date: Monday 10 Aug 2020
(Sharecast News) - London stocks were set for gains at the open on Monday as investors continue to cheer last week's stronger-than-expected US jobs data.
The FTSE 100 was called to open 30 points higher at 6,062.
CMC Markets analyst Michael Hewson said: ""Last week's economic data pointed to a US economy, that for now doesn't appear to have been affected as badly as first thought in respect of the sharply rising coronavirus infection and death rates, that has caused such immense disruption across a number of US states, including the sunbelt states of California, Arizona, Texas and Florida.
"Better-than-expected weekly jobless and continuing claims, as well as a well-received July payrolls report pointed to a continued rebound in economic activity after 1.76m jobs were added to the previous months combined total of 7.5m jobs."
The positive call came even as US lawmakers failed to agree on a new stimulus package and despite worsening relations between the US and China.
"In order to offset some of this political deadlock, President Trump signed a series of executive orders to maintain some benefit assistance including a lower level of unemployment benefits as well as a payroll tax cut," said Hewson.
"President Trump's decision at the end of last week to ban Chinese apps like TikTok and WeChat from US app stores, is yet another decision that could prompt a counter response and possible escalation from Beijing, with US companies operating in Hong Kong and China, particularly vulnerable. The US President also announced sanctions against a number of Chinese officials including Hong Kong leader Carrie Lam at the end of last week."
In UK corporate news, shipping services firm Clarkson said it would reinstate a previously deferred dividend as it reported a "robust" first half with higher profits driven by its broking division.
The company said it would now pay the equivalent of the 2019 final dividend of 53p per share as an interim dividend next month and also declared a further interim payout of 25p per share which would be paid on December 11.
Underlying profit before taxation rose slightly to £21.1m from £20.1m a year earlier on revenue of £180.4m, up from £167.8m.
ContourGlobal increased its dividend as the power plant owner and operator reported an 11% increase in first-half profit and no significant effect from Covid-19. Income from operations for the six months to the end of June rose to $158m (£121m) from $143m as revenue increased 10% to $680m.
The company increased its second quarter dividend by 10% to 4.0591 cents a share and said it intended to maintain that level of increase.
Both FirstGroup and Go-Ahead issued statements welcoming the government's fresh round of regional bus funding on Monday, after the Department for Transport confirmed a further eight-week £218.4m package.
After that, weekly funding of up to £27.3m would be available until no longer required.
Passenger volumes were returning, albeit nowhere near the pre-Covid levels, with FirstGroup saying volumes were now around 40% for First Bus operations in England, compared to about 10% at their low point.
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