LONDON MARKET EARLY CALL: Stocks Set For Mild Recovery; Barclays Ahead

(Alliance News) - Stock prices in London are seen opening slightly higher on Thursday, rebounding ...

Alliance News 18 February, 2021 | 6:59AM
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(Alliance News) - Stock prices in London are seen opening slightly higher on Thursday, rebounding from a lower close on Wednesday, as Barclays becomes the first major UK bank to report annual results.

IG futures indicate the FTSE 100 index is to open 13.00 points higher at 6,723.90. The blue-chip index closed down 37.96 points, or 0.6%, at 6,710.90 Wednesday.

Sentiment has been underpinned by hopes US President Joe Biden's massive USD1.9 trillion stimulus package will be passed, as well as ongoing optimism over vaccine rollouts.

"In recent weeks global stock markets have been in rude health as traders have been banking on the Biden administration to approve the proposed USD1.9 trillion stimulus scheme. In addition to that, the progress made with respect to the distribution of vaccines has added to the positive move too. On Monday, it was confirmed the UK hit its vaccine target - vaccinating 15 million people by 15 February. The update triggered chatter that Britain could ease up on some of its restrictions in the next few weeks, so that contributed to the wider view the global economy will recover from the pandemic in the months ahead," said CMC Markets analyst David Madden.

The pound was quoted at USD1.3852 early Thursday, up slightly from USD1.3845 at the London equities close Wednesday.

UK Prime Minister Boris Johnson is awaiting new data on the effects of vaccines on coronavirus after stressing he will take a "cautious and prudent approach" to easing England's national lockdown.

Johnson is understood to be expecting updated evidence of jabs' effect on hospital admissions and deaths to be with him by the end of Friday, ahead of setting out his "road map" next week.

But it was unclear whether the early data would include vaccines' effect on transmission, with the results of two key Public Health England studies possibly not available until next month.

Johnson stressed on Wednesday that any easing of restrictions needs to be in stages and in an "irreversible" way as he was urged to focus on the evidence rather than deadlines when lifting restrictions.

The euro was priced at USD1.2046, higher against USD1.2036. Against the yen, the dollar was trading at JPY105.91, up from JPY105.82.

Brent oil was quoted at USD65.07 a barrel Thursday morning, up sharply from USD63.53 late Wednesday, as US refining and extraction capacity remains shuttered due to deadly wintry conditions in Texas.

Gold was trading at USD1,78.25 an ounce, higher versus USD1,774.53.

The Japanese Nikkei 225 index closed down 0.2% on Thursday. In China, the Shanghai Composite was up 0.4%, while the Hang Seng index in Hong Kong was down 1.3%. Financial markets in Shanghai reopened after being closed over the past week for the Lunar New Year holiday. The S&P/ASX 200 in Sydney ended flat.

In the US on Wednesday, Wall Street ended mixed, with the Dow Jones Industrial Average up 0.3%, the S&P 500 flat and Nasdaq Composite down 0.6%.

The Covid-19 pandemic continues to pose risks to the US economy, but medium-term prospects have brightened, minutes from the Federal Reserve's January meeting showed.

The economy is "still far" from the Fed's goals, the minutes released on Wednesday showed, and it is likely to take "some time" before further progress towards the central bank's employment and inflation targets is achieved.

The Fed noted that the pace of economic recovery had moderated in recent months, and the path ahead will depend significantly on the course of the virus and vaccine roll-out.

The UK corporate calendar on Thursday has full-year results from lender Barclays, medical technology firm Smith & Nephew, gold miner Hochschild Mining and recruitment firm Hays.

In the economic calendar for Thursday, there is Irish inflation at 1100 GMT and US initial jobless claims at 1330 GMT.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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