Source: Sharecast
The FTSE 100 was called to open unchanged at 8,761.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "So, here we are on July 1st. US equities are back at all-time highs. Most headlines credit the rebound to optimism around trade negotiations - hopes that deals will be struck before the July 9 deadline - and expectations that the Federal Reserve (Fed) could cut rates sooner rather than later. But this rally is mostly driven and shouldered by AI optimism - the rest remains uncertain.
"The trade headlines, while encouraging, aren’t especially promising. The negotiations with Japan are bumpy. The Japanese, understandably, are reluctant to buy American rice, and as a result, they may soon receive a ‘reveal letter’ detailing the tariff rate they’ll be subjected to. As for the EU, talks are just as uncertain. European could accept 10% universal tariff but demand exceptions for key sectors like drugs, alcohol, chips, planes, cars, steel and aluminium that they might not get."
On home shores, figures released by Nationwide showed that house prices fell 0.8% on the month in June, following 0.4% growth in May.
On the year, house price growth slowed to 2.1% last month from 3.5% in May.
The average price of a home stood at £271,619 in June, versus £273,427 a month earlier.
Nationwide chief economist Robert Gardner said: "The softening in price growth may reflect weaker demand following the increase in stamp duty at the start of April. Nevertheless, we still expect activity to pick up as the summer progresses, despite ongoing economic uncertainties in the global economy, since underlying conditions for potential homebuyers in the UK remain supportive.
"The unemployment rate remains low, earnings are rising at a healthy pace in real terms (i.e. 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."
Investors were also mulling the latest British Retail Consortium-NIQ Shop Price Index, which showed that prices returned to inflation in June on the back of a big jump in food prices, fuelled by high wholesale prices and rising wage bills.
Prices at UK tills were up 0.4% compared with last June, following a 0.1% year-on-year decline in May.
The annual rate of food inflation surged to 3.7% from 2.8%, while non-food deflation eased to -1.2% from -1.5%.
This was the first time in nearly a year that headline shop prices recorded year-on-year growth, according to BRC chief executive Helen Dickinson, who linked the return to inflation to the increased costs for retailers listed in the Autumn Budget, which took effect in April.
In corporate news, supermarket chain Sainsburys reported a sharp jump in first-quarter like-for-like sales as consumers tucked into its new range of ‘Taste the Difference’ products including Spanish Jamón Croquetas.
Sales for the period rose 4.7% compared with 4% in the final quarter of 2024 and 2.9% a year ago.
Sainsburys said it continued to expect to deliver retail underlying operating profit of around £1bn and retail free cash flow of more than £500m.
Energy firm Drax said it has appointed Frank Lemmink to take over from Andy Skelton as chief financial officer, with effect from 1 September.
Lemmink will join Drax from Shell, where he has served as executive vice president of its flagship Integrated Gas and Upstream business since 2023. Skelton will continue to support Drax in the succession process until 4 December.