LONDON MARKET EARLY CALL: Higher call as Germany Social Democrats win

(Alliance News) - Stock prices in London are seen opening higher on Monday, as investors digest ...

Alliance News 27 September, 2021 | 6:01AM
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(Alliance News) - Stock prices in London are seen opening higher on Monday, as investors digest election results from Germany while monitoring developments at the troubled Chinese property company Evergrande.

Evergrande missing a key interest payment on Thursday last week, and markets will be keeping a close eye on another payment due this week.

IG futures indicate the FTSE 100 index is to open 49.62 points higher at 7,101.10. The blue-chip index closed down 26.87 points, or 0.4%, at 7,051.48 Friday.

In the US on Friday, Wall Street ended mostly higher, with the Dow Jones Industrial Average up 0.1%, S&P 500 up 0.2%, and Nasdaq Composite marginally lower.

The Japanese Nikkei 225 index was down 0.1% on Monday. In China, the Shanghai Composite was down 1.0%, while the Hang Seng index in Hong Kong was up 0.4%. The S&P/ASX 200 in Sydney was up 0.5%.

Germany headed into a period of unpredictability Monday after a tight election saw both main parties claim the right to lead Europe's biggest economy, leaving the question of who will succeed Angela Merkel wide open.

Preliminary results showed that the centre-left Social Democrats had won the largest share of the vote at 25.7%, while Merkel's CDU/CSU bloc fell to a record low of 24.1% after her many years in office.

The SPD's chancellor candidate, Finance Minister and Vice-Chancellor Olaf Scholz and Armin Laschet from Merkel's conservatives have each claimed a mandate to govern, setting off a scramble for potential coalition partners.

"What this means for German politics is that nothing much is likely to change in the short term, with investor attention likely to remain on events in China, and Asia more broadly, as well as the various supply crunches taking place across the world," said CMC Markets analyst Michael Hewson.

"We also need to be cognisant of the fact that we are coming up to the end of the month, as well as the end of the quarter, which could temper, or exacerbate market volatility. Asia markets have had a somewhat mixed session, with the Nikkei giving up some decent early gains, with markets here in Europe looking set to open higher."

The pound was quoted at USD1.3677 early Monday, marginally up from USD1.3670 at the London equities close Friday.

The euro was priced at USD1.1723, up from USD1.1710. Against the yen, the dollar was trading at JPY110.59, down from JPY110.73 late Friday.

Brent oil was quoted at USD79.12 a barrel Monday morning, up sharply from USD77.86 late Friday. Gold stood at USD1,758.12 an ounce, higher against USD1,751.33.

The UK corporate calendar for Monday has a trading statement from United Utilities and half-year results from i3 Energy, Microsaic Systems and FireAngel Safety Technology.

Ahead in the economic calendar this week, plumbing and heating products supplier Ferguson and engineer Smiths Group report annual results on Tuesday.

A quiet economic calendar on Monday has US durable goods orders at 1330 BST.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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