LONDON MARKET EARLY CALL: Weaker Start Ahead As Oil-Led Rally Runs Dry

LONDON (Alliance News) - Stock prices in London are seen Wednesday backing off from the previous ...

Alliance News 24 April, 2019 | 6:55AM
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LONDON (Alliance News) - Stock prices in London are seen Wednesday backing off from the previous session's oil-driven gains, after equities in Asia failed to capitalise on Wall Street's rally.

IG says futures indicate the FTSE 100 index of large-caps to open 18.47 points lower at 7,504.60 on Wednesday. The FTSE 100 index closed up 63.19 points, or 0.9%, at 7,523.07 on Tuesday.

In the US on Tuesday, Wall Street ended firmly in the green, with the Dow Jones Industrial Average ending up 0.6%, the S&P 500 up 0.9% and the Nasdaq Composite climbing 1.3%.

"Earnings season has was major driver of the bullish sentiment on Wall Street yesterday," said David Madden at CMC Markets. "Solid quarterly updates from Twitter, Coca Cola, United Technologies and Lockheed Martin helped the S&P 500 to post a record close."

However, he continued: "Asian markets had a hot and cold session, as gains were made in the first-half of the trading day, on the back of the bullish sentiment in the US, but the rally ran out of steam, and markets are now in the red."

In Asia on Wednesday, the Japanese Nikkei 225 index is down 0.3%. In China, the Shanghai Composite is 0.3% lower, while the Hang Seng index in Hong Kong is down 0.6%.

Brent oil was quoted at USD74.25 a barrel early Tuesday in London, marginally down from USD74.46 late Wednesday, though still well up from last week.

In the UK, senior members of the Conservative party are expected to hold further discussions on whether to change the party rules to enable an early leadership challenge to UK Prime Minister Theresa May.

Officers of the Tory backbench 1922 Committee met in Westminster on Tuesday amid growing pressure for the Prime Minister to name the date of her departure. Afterwards there was no formal statement from the meeting, which was said have been inconclusive.

Ahead of Tuesday's talks, the committee chair Graham Brady met privately with May, when he is reported to have told her MPs want her to announce when she is going. Under current party rules, MPs cannot mount a fresh leadership challenge until 12 months after last December's failed attempt.

However, amid growing frustration over the latest delays to Brexit, some MPs now want to the rules to be rewritten to allow another challenge as early as June.

Sterling was quoted at USD1.2935 early Wednesday, broadly unchanged compared to USD1.2932 at the London equities close on Tuesday.

"The overriding concern for currency traders right now is if Theresa May is ousted, who will replace her? And how far will they be willing to go to achieve Brexit. Suddenly, the no deal Brexit option could be back on the table," commented Jasper Lawler, head of research at London Capital Group.

In the economic calendar, the Ifo German business climate survey at 0900 BST and UK public sector borrowing at 0930 BST. In the afternoon, there is the Bank of Canada's latest interest rate decision at 1500 BST and US MBA mortgage applications at 1200 BST.

In the UK corporate calendar on Wednesday, there are annual results from online fashion retailer Boohoo and interim results from Associated British Foods, parent of bricks-and-mortar clothing retailer Primark.

There are also first quarter results from speciality chemicals firm Croda International and a trading statement from building materials firm CRH.

By Lucy Heming;

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