UK Indices Higher on Further Stimulus Hopes

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Tuesday, June 2: European markets edged higher at the open, following the gains seen yesterday across Europe. The DAX 30 was closed for a public holiday yesterday but rallied hard as it caught up from yesterday’s optimistic price moves, but was also boosted by news of a bailout package for Germany flag carrier Lufthansa(+3.92%) from the German government.

UK indices were powered by hopes of additional government stimulus to stem the economic impact of coronavirus, combined with optimism of a fast recovery due to the alleviation of lockdown measures. The FTSE 100 was 0.87% higher at the close following a report that Chancellor Rishi Sunak was considering national insurance holidays for companies as part of a stimulus package rumoured to be announced in July.

Clipper Logistics climbed 9.00% at the open as it issued a pre-close trading statement for FY20. The Group alluded to some minor disruption in the early throes of lockdown but noted that strong levels of activity emerged from both new & existing clients. In particular, the Group notes that many of its online customers saw volumes which outstripped those seen on Black Friday last year. The Group also mobilised additional services for Asda, Tesco, Morrisons, and supported NHS supply chains in an effort to deliver PPE to the frontline. The Company compiled consensus stands at (FY21  EBIT)£25.8m, but management believe results will be comfortably ahead of expectations.

The latest house price survey from Nationwide showed that UK house prices fell 1.7% in May, reducing the annual rate of price inflation to 1.8%, down from 3.7% in April, the largest monthly fall in 11 years. The survey suggested there was a 53% drop in housing transactions for the month of April year-on-year. Nationwide says that early indicators point to activity returning to the market, but its own survey results illustrated that 12% of the population have put off moving due to the lockdown. Would-be buyers are said to be staying on the sidelines for six months before looking to re-enter the housing market.

European markets were higher at the close, with the FTSE 100 +0.87%, the CAC 40 +1.76% and the DAX 30 +3.51%.

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