Wolseley sales see solid rise, Serco signs £1.5bn Aussie prison deal

The FTSE 100 is expected to open flat on Tuesday, after closing up 0.81% at 7,523.81 on Monday.

Stocks to watch

Wolseley turned up the dial on sales in the third quarter, as the heating and plumbing group enjoyed good growth from its main US residential and commercial markets and improving industrial markets. The FTSE 100 group, which is changing its corporate name to Ferguson to reflect the importance of its main US brand, saw sales rise 16.7% to £4.27bn in the three months to the end of April, up 4.6% at constant exchange rates and 6.6% on a like-for-like basis.

International service company Serco Group announced on Tuesday that it had signed the contract and completed financial agreements to operate the New Grafton Correctional Centre in New South Wales, Australia, having been named the ‘preferred bidder’ in March. The FTSE 250 company said the contract for operation was expected to commence in 2020, with the estimated total contract value to Serco over a 20-year term being approximately AUD2.6bn (£1.5bn).

Ultra Electronics has been awarded a "major" surveillance and security system contract valued at $18m over the next 26 months. In addition, the company's Communication & Integrated Systems business will provide five years of specialist support over the course of the system's use. Chief executive Rakesh Sharma said: "I am pleased we have signed this agreement which recognises Ultra's position in the supply of surveillance and security systems to an international customer. Our wide portfolio of capabilities was key to securing the initial contract and we are delighted by the agreement to provide long-term support for the programme."

Newspaper round-up

David Davis bowed to European demands that Britain agree the principle of its multibillion-pound Brexit bill before talks on a new trade agreement can begin, as formal negotiations got under way in Brussels yesterday. In a significant climbdown, less than a month after declaring that the sequencing of the talks would be “the row of the summer”, Mr Davis changed tack and signed up to the main principles of the EU’s position. - The Times

David Davis and the EU slammed the door on any prospect of a “soft” Brexit as formal negotiations on leaving the EU finally got underway in Brussels. The Brexit Secretary confirmed Britain would be leaving the customs union and the single market, in a move designed to scupper any parliamentary plots to water down the terms of the UK’s withdrawal from Europe. - Telegraph

Labour, Liberal Democrat and SNP MPs are joining forces to try to bring down Theresa May's Government by passing amendments in Wednesday's Queen’s Speech. The Opposition parties only need seven MPs to change sides to overturn the Government's 13-strong working majority which could trigger a no confidence motion in Parliament. - Telegraph

Conservative MPs have called on colleagues to calm down and rally around Theresa May following a suggestion that the prime minister has just 10 days to save her leadership. A number of politicians, including ministers, insisted that the British public was in no mood for another general election as they expressed anger about any attempts to destabilise the party. - Guardian

Ministers have urged Downing Street to “get a grip” amid signs of a free-for-all among cabinet figures apparently positioning themselves for a future without Theresa May as prime minister. Boris Johnson, the foreign secretary, bemused Conservative MPs by appearing on BBC Radio 4’s Today programme minutes after Michael Gove, the environment secretary, yesterday morning. Both talked about Brexit. - The Times

US close

US stocks ended in the black on Monday, with the Dow and S&P 500 at record highs thanks to gains in the technology sector.

The Dow Jones Industrial Average closed up 0.7% at 21,528.99, the S&P 500 ended 0.8% higher at 2,453.46 and the Nasdaq advanced 1.4% to 6,239.01.

Amazon.com and Whole Foods were in focus again, with both stocks on the front foot following Friday’s deal announcement.

Chris Beauchamp, chief market analyst at IG, said: “After a 3% drop in the past two weeks, tech is once again in favour among US investors. In this market, 3% evidently counts as a healthy dip, with the Amazon M&A from Friday still spicing up the session as well.

“It is odd to see all the problems that were supposed to be hamstringing markets disappear with barely a passing reference uttered, but we should not be surprised; this bull market has survived everything that could be thrown at it, and it has come back time and time again. It is hardly likely to be different this time.”

Elsewhere, banks also found a bid after New York Fed chief William Dudley was quoted as having said at a roundtable discussion that the US central bank should continue hiking rates. The KBW gauge of lenders' shares was advancing 1.10% to 94.77.