LONDON MARKET EARLY CALL: FTSE to start slowly as focus shifts to ECB

(Alliance News) - Stock prices in London are seen opening a touch higher on Monday, with the ...

Alliance News 6 September, 2021 | 6:54AM
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(Alliance News) - Stock prices in London are seen opening a touch higher on Monday, with the session expected to a lack some impetus with US markets closed for Labor Day and as traders digest last week's jobs report miss.

IG futures indicate the FTSE 100 index is to open 10.2 points higher, or 0.1%, at 7,148.55. The blue chip index ended down 25.55 points, or 0.4%, at 7,138.35 on Friday.

"The soft payroll data from Friday should lift European equities into the green today, with a Fed tapering having been dealt a severe blow," Oanda analyst Jeffrey Halley commented.

Stocks in New York closed mixed on Friday in the wake of the nonfarms data. The Dow Jones Industrial Average closed down 0.2%, the S&P 500 fell marginally, while the Nasdaq Composite rose 0.2%.

As this week progresses, central banks will be in focus. The European Central Bank reports its latest interest rate decision on Thursday, after the Bank of Canada on Wednesday and Reserve Bank of Australia on Tuesday.

"There will be no change of the lower forever interest rates, but recent eurozone inflation data has had the northern European hawks squawking loudly and hunting for doves. Noise has risen around tapering, but I believe the ECB will note the data from China, the Asian PMIs and the US non-farm payrolls and clip the hawks' wings this time around," Halley added.

The pound faded against the dollar early Monday. Sterling fell to USD1.3846 from the USD1.3866 it fetched at the London equities close on Friday. The euro slipped to USD1.1867 from USD1.1883. Against the yen, the dollar fell to JPY109.78 from JPY109.98.

Equities in Asia started the week strongly. In China, the Shanghai Composite was 1.1% higher, and the Hang Seng in Hong Kong was up 0.9%. In Tokyo, the Nikkei 225 was up 1.8%, having advanced 2.3% on Friday.

CMC Markets analyst Michael Hewson commented: "The resignation of Japanese PM Yoshihide Suga now sets the wheels in motion for an election by the end of the year, after his popularity plunged as a result of the government's shambolic Covid-19 response.

"His departure also opens up the prospect that a new leader will embark on a new stimulus programme, with one of the main challengers and front-runner Fumio Kishida pledging a new program of measures worth trillions of yen."

Brent oil was quoted at USD71.64 a barrel early Monday in London, down from USD72.96 late Friday. Gold was trading at USD1,826.13 an ounce, down from USD1,831.95.

Monday's corporate calendar has full-year results from Dechra Pharmaceuticals and platinum group metals producer Sylvania Platinum. Investment firm HgCapital reports interim results.

By Eric Cunha; ericcunha@alliancenews.com

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