(Alliance News) - Stocks in London are set for a positive start to December on Tuesday after some profit-taking at the end of a strong November.
IG says futures indicate the FTSE 100 index of large-caps to open up 41.31 points, or 0.7%, at 6,307.50 on Tuesday. The FTSE 100 closed down 101.39 points, or 1.6%, at 6,266.19 on Monday - though ended up 12% for the month of November.
"US equities were weaker Monday, S&P down [a half percent] heading into the close. The main narrative underpinning sentiment over the past 24 hours appears to confluence month-end portfolio rebalancing and weaker economic data expectations in December as Covid concerns flare up again," said Stephen Innes, chief global markets strategist at Axi.
In the US on Monday, Wall Street ended with mild losses, with the Dow Jones Industrial Average ending down 0.1%, the S&P 500 down 0.5% and the Nasdaq Composite 0.1% lower.
Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell offered mirror images of the state of the US economy as it navigates the Covid-19 downturn in testimony released Monday ahead of appearances before Congress.
Mnuchin, serving his final weeks on the job before President-Elect Joe Biden's administration takes office in January, hailed the country's recovery thus far, but Powell warned of continued uncertainty. Both noted progress on job gains, and Powell pointed to hopeful news about new vaccines that could be coming soon, but added a note of caution.
Axi's Innes continued, however: "Flashing green lights at the end of the tunnel suggest investors should look through the immediate Covid-19 concerns and focus on the future, which seems incredibly bright and bullish. So, with month-end selling pressure mostly out of the way, it could allow investors to focus on those flashing green sectoral lights at the end of the Covid tunnel."
In more strong economic data from China, manufacturers signalled the strongest improvement in operating conditions for a decade in November, as growth of both output and new orders accelerated to ten-year highs.
The Caixin China headline seasonally adjusted purchasing managers' index increased to 54.9 in November from 53.6 in October, to signal the sharpest improvement in conditions since November 2010 and well clear of the neutral mark of 50.
Firms frequently attributed the increase to greater new order volumes, IHS Markit said, as well as a further recovery from the Covid-19 related disruptions seen earlier in the year. Underlying data suggested that the upturn continued to be led by firmer domestic demand, as growth in new export work was not as marked as that seen for total new orders.
In China on Tuesday, the Shanghai Composite is up 1.9%, while the Hang Seng index in Hong Kong is up 1.0%.
In Tokyo, the Nikkei 225 index closed up 1.3%. Against the yen, the dollar rose to JPY104.36 versus JPY104.27 late Monday.
On the vaccine front, Moderna on Monday filed requests for emergency authorization of its Covid-19 vaccine in the US and Europe, after full results confirmed a high efficacy estimated at 94.1%.
"We believe that our vaccine will provide a new and powerful tool that may change the course of this pandemic and help prevent severe disease, hospitalizations and death," said Moderna CEO Stephane Bancel.
If the US Food & Drug Administration agrees it is safe and effective, the first of the drug's two doses could be injected into the arms of millions of Americans by the middle of December.
American pharmaceutical Pfizer and Germany's BioNTech applied for similar approvals last week, and their vaccine could be greenlit in the US shortly after December 10.
David Madden at CMC Markets commented on the Moderna news: "From a health point of view it was very encouraging but it failed to boost sentiment in stocks [on Monday], probably because dealers were more than happy to bank some profits from the previous month's gains."
Sterling was quoted at USD1.3365 early Tuesday, higher than USD1.3343 at the London equities close on Monday. The euro traded at USD1.1956, rising from USD1.1948 late Monday.
Gold was quoted at USD1,784.82 an ounce early Tuesday, higher than USD1,772.60 on Monday.
Brent oil was trading at USD47.47 a barrel, softer than USD47.75 late Monday.
The OPEC oil producers' club will hold a second day of talks on Tuesday, as they attempt to reach agreement on extending production cuts introduced as the coronavirus pandemic weighs on global demand.
"2020 continues to be a year of immense challenges caused by the Covid-19 pandemic," said Abdelmadjid Attar, who currently holds the rotating presidency of the Organisation of the Petroleum Exporting Countries. Attar, who is also Algeria's energy minister, was speaking in a live broadcast at the beginning of the group's videoconference meeting.
In April, OPEC members agreed to cut production by 7.7 million barrels per day, which was meant to be eased to 5.8 million barrels in January 2021. However, most observers expect the cut instead to be extended by three to six months to take into account the ongoing effects of the virus.
Monday's talks were adjourned with no decision and Tuesday's discussions "won't be easy", said Iran's oil minister Bijan Namdar Zanganeh.
Elsewhere, Tuesday's economic events calendar has manufacturing PMI readings from Germany, the eurozone, the UK and the US at 0855 GMT, 0900 GMT, 0930 GMT and 1445 GMT respectively.
The UK corporate calendar on Tuesday has annual results from Topps Tiles and Hyve Group.
By Lucy Heming; lucyheming@alliancenews.com
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