20th Apr 2015 06:00
LONDON (Alliance News) - UK shares are set to open higher Monday, following the news that China's central bank on Sunday lowered the amount of cash financial institutions are required to hold as reserves.
As Chinese state media reported, designed to stimulate growth, the one percentage point cut to the reserve requirement ratio goes into effect on Monday.
"As we head into a new week we could well get a positive boost from the weekend's decision by the Chinese central bank to enact further easing measures after last week?s disappointing economic data for March. A cut in the reserve requirement ratios to 18.5% from 19.5% is the latest measure this year to help oil the wheels of the slowing Chinese economy, and was a much larger reduction than many in the market had been expecting," says Michael Hewson, chief analyst at CMC Markets UK.
China had been widely expected to introduce stimulus measures to meet its annual growth target of 7% after the quarterly gross domestic product this week dropped to its slowest rate of growth in six years.
IG says futures indicate the FTSE 100 to open 30.3 points higher at 7,024.9 . The index ended Friday down 0.9% at 6,994.63, meaning it fell 1.3% for the week as a whole. The index closed below the 7,000 mark for the first time since April 9 amid a broader equities sell-off across Europe and the US.
Wall Street also ended lower Friday. The DJIA closed down 1.5%, the S&P 500 ended down 1.1% and the Nasdaq Composite finished down 1.5%.
In Asia on Monday, the Japanese Nikkei 225 trades down 0.1%, and the Hang Seng is up 1.0%. Meanwhile, the Shanghai Composite is trading up 0.7%.
Brent crude is quoted at around USD64.12 a barrel Monday, and US benchmark West Texas Intermediate is quoted at USD56.46 a barrel. Gold is quoted early Monday at USD1,204.38 an ounce.
In the UK corporate calendar Monday, Evraz releases its first quarter production results, while HSS Hire Group and North Midland Construction publish full-year results.
In the economic calendar, the German producer price index is due at 0700 BST.
By Daniel Ruiz; [email protected]
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Related Shares:
EvrazHss HireNorth Midland Construction