LONDON MARKET EARLY CALL: Mood bright on encouraging earnings, data

(Alliance News) - Stock prices in London are set extend gains into Friday as investors breathe a ...

Alliance News 15 October, 2021 | 7:00AM
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(Alliance News) - Stock prices in London are set extend gains into Friday as investors breathe a sigh of relief following largely upbeat US banking earnings and reassuring factory price data.

"After a choppy start to the week, equity markets appear to be leaning towards a narrative that companies can continue to grow profits, despite the combined pressures of higher energy prices, and supply chain disruptions," said Michael Hewson, chief market analyst at CMC Markets.

IG says futures indicate the FTSE 100 index of large-caps to open up 27.99 points, or 0.4%, at 7,235.70 on Friday. The FTSE 100 closed up 65.89 points, or 0.9%, at 7,207.71 on Thursday.

"As we look towards today's European open the FTSE 100 looks set to open at an eighteen-month high," CMC's Hewson said.

This follows buoyant performance in New York and Asia overnight.

In the US on Thursday, Wall Street rallied, with the Dow Jones Industrial Average ending up 1.6%, the S&P 500 up 1.7% and the Nasdaq Composite up 1.7%

In Asia on Friday, the Japanese Nikkei 225 index was up 1.5%. In China, the Shanghai Composite was up 0.4%, while the Hang Seng index in Hong Kong was up 1.1%. The S&P/ASX 200 in Sydney was up 0.7%.

Sterling was quoted at USD1.3683 early Friday, firm against USD1.3680 at the London equities close on Thursday.

The euro traded at USD1.1607 early Friday, higher than USD1.1587 late Thursday. Against the yen, the dollar was quoted at JPY114.07 versus JPY113.63 - the dollar breaking above the JPY114.0 mark for the first time in nearly three years.

Gold was quoted at USD1,792.50 an ounce early Friday, down from USD1,797.11 on Thursday. Brent oil was trading at USD84.66 a barrel, up from USD83.75 late Thursday.

"Market risk sentiment improved noticeably as US banking heavyweights rolled out a procession of strong earnings prints, weekly initial jobless claims fell by much more than expected and US YoY and MoM headline and core PPI rose by less than expected," said Jeffery Halley, senior market analyst at Oanda.

Data on Thursday showed weekly US initial jobless claims hit a fresh post-pandemic low, at 293,000, while factory prices rose 8.6% annually at their fastest rate since November 2010, but not quite as fast as the 8.7% growth analysts had pencilled in.

Capping off the week's data calendar are US retail sales at 1330 BST on Friday.

Meanwhile, Goldman Sachs will top off the third-quarter reporting season for US banks, after a string of broadly well-received results.

The UK corporate calendar on Friday has a trading statement from stockbroker Hargreaves Lansdown and third-quarter results from educational publisher Pearson.

By Lucy Heming; lucyheming@alliancenews.com

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