LONDON MARKET EARLY CALL: Stocks To Dip As Busy Central Bank Week Ends

(Alliance News) - Stocks in London are set for a subdued end to the week, digesting the raft of ...

Alliance News 18 September, 2020 | 7:02AM
Email Form

(Alliance News) - Stocks in London are set for a subdued end to the week, digesting the raft of central bank updates that have come in over recent days.

IG says futures indicate the FTSE 100 index of large-caps to open 5.12 points lower at 6,044.80 on Friday. The large-cap index closed down 28.56 points, or 0.5%, at 6,049.92 on Thursday.

"Today's European session is likely to see a cautiously mixed start as we come to the end of a week that has seen central banks decide to sit on the sidelines for the time being," said Michael Hewson, chief market analyst at CMC Markets.

Stocks on Thursday ended in the red, with the Dow Jones Industrial Average ending down 0.5%, the S&P 500 down 0.8% and Nasdaq Composite down 1.3%.

Things were a touch more upbeat in Asia on Friday, with the Japanese Nikkei 225 index up 0.1%. In China, the Shanghai Composite is up 1.5%, while the Hang Seng index in Hong Kong is up 0.5%.  

Against the yen, the dollar was flat at JPY104.81 early Friday versus JPY104.79.

The euro traded at USD1.1852, higher than USD1.1821 late Thursday.

Sterling was quoted at USD1.2958 early Friday, flat on than USD1.2955 at the London equities close on Thursday.

In the economic calendar on Friday, there are UK retail sales and Germany's producer price index, both at 0700 BST.

The UK is likely to post some "decent" retail sales figures for August given the government's Eat Out to Help Out scheme, said CMC's Hewson.

"Of course with localised lockdowns and curfews now starting to be reimposed this could well be as good as it gets, and that could well be why the Bank of England is starting to look at further measures to help support the economy, especially with the political noise around Brexit and a UK/EU trade deal starting to get a bit louder."

The European Commission president has said she is "convinced" a trade deal remains possible with the UK but called Boris Johnson's attempt to override the Brexit treaty an "unpleasant surprise".

Ursula von der Leyen, in comments made to reporters on Thursday, said Downing Street's controversial UK Internal Market Bill had "distracted very strongly" from the two sides being able to secure fresh trade terms before the looming deadline.

The post-Brexit transition period, during which relations between the EU and the UK have remained static, is due to end after December 31 and leaders on both sides of the Channel have warned that an agreement is needed by October if a deal is to be ratified in time for the start of 2021.

With the cliff edge only a month away, the prime minister has faced criticism domestically and on the world stage for pursuing legislation that would defy the Withdrawal Agreement brokered with the EU last year, breaking international law in the process. Johnson was forced on Wednesday to agree to table an amendment to the Internal Market Bill, giving MPs a vote before the government can use the powers related to Northern Ireland which would breach the treaty.

Despite the wrangle over the bill – which has been derided by every living former prime minister, scores of senior Tory backbenchers, US Democratic presidential candidate Joe Biden and Brussels – commission president von der Leyen said she remained sure that consensus on a future partnership with the UK could be reached.

Gold was quoted at USD1,953.60 an ounce early Friday, higher than USD1,946.60 on Thursday. Brent oil was trading at USD43.60 a barrel , up from USD43.22 late Thursday.

The UK corporate calendar on Friday will be headlined by half-year results from Irish petrol filling station operator Applegreen and a trading statement from financial services firm Investec.

By Lucy Heming;

Copyright 2020 Alliance News Limited. All Rights Reserved.

Email Form

About Author

Alliance News

Alliance News provides Morningstar with continuously updating coverage of news affecting listed companies.

Audience Confirmation

By clicking 'accept' I acknowledge that this website uses cookies and other technologies to tailor my experience and understand how I and other visitors use our site. See 'Cookie Consent' for more detail.

  • Other Morningstar Websites
© Copyright 2020 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies