LONDON MARKET EARLY CALL: Stocks to remain subdued after recent rally

(Alliance News) - Stocks in London are set to edge into the red on Tuesday, as new data suggests ...

Alliance News 28 November, 2023 | 6:43AM
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(Alliance News) - Stocks in London are set to edge into the red on Tuesday, as new data suggests inflation in the UK is continuing to ease.

IG says futures indicate the FTSE 100 to open down 2.5 points at 7,458.2 on Tuesday. The index of London large-caps closed down 27.50 points, 0.4%, at 7,460.70 on Monday.

UK shop price inflation fell for the sixth month in a row in November, hitting levels not seen since June 2022, figures showed.

Annual inflation decelerated to 4.3% in November, down from 5.2% in October, according to BRC-Nielsen Shop Price Index data. This is below the three-month average rate of 5.3%.

Non-food inflation cooled to 2.5% in November, down from 3.4% in October, below the three-month average rate of 3.5%.

Food inflation eased to 7.8% in November, down from 8.8% in October, below the three-month average rate of 8.9% and the seventh consecutive deceleration in the food category.

Meanwhile, the dollar was weaker in early exchanges in Europe, as traders assessed the outlook for rate cuts from the Federal Reserve, and US bond yields retreated.

"When combined with a weak October new home sales report, as well as a weak Dallas Fed manufacturing survey, it is becoming increasingly apparent that markets believe that we will start to see rate cuts by the middle of next year, despite the attempts of various Fed officials to push back on this idea," said CMC Markets' Michael Hewson.

Sterling was quoted at USD1.2627 early Tuesday, rising from USD1.2604 at the London equities close on Monday. The euro traded at USD1.0949, higher than USD1.0931. Against the yen, the dollar was quoted at JPY148.23, down versus JPY148.97.

In the US on Monday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.2%, the S&P 500 down 0.2% and the Nasdaq Composite down 0.1%.

In Asia on Tuesday, the Nikkei 225 index in Tokyo closed down 0.1%. In China, the Shanghai Composite was up 0.1%, while the Hang Seng index in Hong Kong was down 0.9%. The S&P/ASX 200 in Sydney closed up 0.4%.

Gold was quoted at USD2,015.99 an ounce early Tuesday, rising from USD2,000.74 on Monday.

Brent oil was trading at USD79.89 a barrel, slightly lower than USD79.98.

On the geopolitical front, a truce between Israel and Hamas will be extended by two days, mediator Qatar said hours before the pause was due to end Tuesday, as more hostages were freed from Gaza in exchange for the release of dozens of Palestinian prisoners.

The extension of the truce, which had been scheduled to end at 7:00am, or 0500 GMT, was welcomed internationally.

In Tuesday's UK corporate calendar, easyJet posts its full-year results, Pets At Home releases its half-year results, while Safestore posts a trading statement.

On the economic side, there's consumer confidence data for Germany and the US, as well as US house prices.

By Elizabeth Winter, Alliance News deputy news editor

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