London pre-open: Stocks seen flat amid growing trade tensions
By Michele Maatouk
Date: Monday 02 Jun 2025
(Sharecast News) - London stocks were set for a flat open on Monday amid growing trade tensions.
The FTSE was called to open unchanged at 8,772.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "Trade tensions are heating up again. Not only does Donald Trump seem unfazed by growing questions around the legitimacy of his tariffs, but he also accused China of violating the trade truce they signed in Geneva earlier this month. The US spent the week cancelling Chinese student visas and imposing fresh restrictions on chip designers doing business in China. China responded, accusing the US of imposing 'discriminatory restrictions.'
"Cherry on top, the US announced an increase in tariffs on steel and aluminium imports to 50%, from the 25% previously in place - perhaps to help facilitate the recent deal between the US and Nippon Steel. Iron ore futures tanked 3% in Singapore last week and remain under pressure this morning. Meanwhile, WisdomTree's industrial metals ETF has been unable to reverse its downtrend from the May trade optimism and is diving again on the back of rising global trade tensions.
"The renewed tariffs on steel and aluminium will likely throw some cold water on negotiations between the EU and the US. The EU's metal exports to the US represent around 1% of its total exports, but the move could still have severe consequences for Europe's already struggling industrial sector. An affair to follow..."
On home shores, the latest data from Nationwide showed that house priced edged higher in May.
Prices rose 3.5% on the year, up from 3.4% growth April. On the month, meanwhile, house prices were up 0.5% in May following a 0.6% decline the month before.
The average price of a home stood at £273,427, versus £270,752 in April.
Nationwide chief economist Robert Gardner said: "Official data confirmed that there was a significant jump in residential property transactions in March, with buyers bringing forward their purchases to avoid additional stamp duty costs. Owner occupier house purchase completions were around twice as high as usual and the highest since June 2021 (which was also impacted by stamp duty changes).
"Nevertheless, mortgage approvals data suggests that market activity appears to be holding up well following the end of the stamp duty holiday. Despite wider economic uncertainties in the global economy, underlying conditions for potential home buyers in the UK remain supportive.
"Unemployment remains low, earnings are rising at a healthy pace (even after accounting for inflation), household balance sheets are strong and borrowing costs are likely to moderate a little if Bank Rate is lowered further in the coming quarters as we, and most other analysts, expect."
In corporate news, Vodafone Group and CK Hutchison Holdings said the merger of telecoms firms Vodafone UK and Three UK successfully completed on 31 May.
The combined business, named VodafoneThree, is 51% owned by Vodafone and 49% by CKHGT.
Vodafone will fully consolidate VodafoneThree in its financial results.
Vodafone UK CEO Max Taylor will lead the merged group while Three UK's Darren Purkis is appointed chief financial officer.
Anglo American said it has officially completed the demerger of its Valterra Platinum business following the approval of shareholders, allowing the company to focus on its copper, iron ore and crop nutrients operations.
Valterra, which is already listed in Johannesburg, is scheduled to start trading in a secondary listing in London from Monday, with Anglo retaining a 19.9% interest in the platinum producer.
Anglo's chief executive Duncan Wanblad said the deal is a "major step in our plan to unlock the inherent value in our portfolio".
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