19th Feb 2025 06:48
(Alliance News) - London's FTSE 100 is set to open unmoved on Wednesday, before a UK inflation reading, while HSBC shares moved higher in Hong Kong after it reported annual results.
IG says futures indicate the FTSE 100 to open 0.4 points lower, largely flat, at 8,767.13 on Wednesday. The index of London large-caps closed down just 1.28 points, flat, at 8,766.73 on Tuesday.
"Markets meandered once more on Tuesday as the hunt for catalysts rumbles on, though the S&P did notch a record close," Pepperstone analyst Michael Brown commented.
"In any case, trade uncertainty will continue to hang like the 'sword of Damocles' over financial markets for the foreseeable future."
Brown noted April 1 is a "key date for the diary", as that's when an assessment on reciprocal tariffs by the US is due to conclude.
"That date also, not coincidentally, falls just within Trump's psychologically important first 100 days in office," the analyst added.
In China, the Shanghai Composite was up 0.7%. The Hang Seng Index in Hong Kong was down 0.6%. In Tokyo, the Nikkei 225 was down 0.3%. The S&P/ASX 200 lost 0.7% in Sydney.
Sterling traded at USD1.2624 on Wednesday morning UK time, rising from USD1.2616 at the time of the London equities close on Tuesday. The euro was flat at USD1.0460 from USD1.0462. Against the yen, the dollar faded to JPY151.61 from JPY151.71.
The economic calendar for Wednesday sees a UK inflation reading released at 0700 GMT.
According to FXStreet cited consensus, the pace of annual consumer price inflation is expected to have picked up to 2.8% in January from 2.5% in December.
Commerzbank analyst Michael Pfister commented: "Yesterday's UK labour market data for December was slightly better than expected - the unemployment rate unexpectedly held steady and wage growth was slightly higher than the Bloomberg consensus. However, there was not much new information in the data, especially given that the labour market survey will be subject to revisions for some time to come as the results are currently not particularly reliable.
"Today's inflation figures are likely to be much more exciting for the pound. It is usually very difficult to predict the exact number."
The analyst continued: "The consensus view is that both the headline and core rates will rise sharply year-on-year, which in turn would mean that the seasonally adjusted month-on-month increase, i.e. the 'new' price pressures, would be extremely high at around 0.5% for the headline rate and 0.7% for the core rate. Given these high expectations, you will understand that a tenth of a percentage point more or less is not going to make much of a difference. Even if the rate were a little lower, the rise in prices would still be far too high and would probably increase the Bank of England's concerns about possible stagflation. And such concerns are certainly not good for a currency in the long run."
In New York on Tuesday, the Dow Jones Industrial Average ended slightly higher. The S&P 500 rose 0.2% and the Nasdaq Composite rose 0.1%.
HSBC shares rose 0.4% in Hong Kong. It lifted its dividend and reported an increase in full year profit.
Pretax profit increased 6.5% to USD32.31 billion in 2024 from USD30.35 billion a year prior. Revenue fell 0.3% to USD65.85 billion from USD66.06 billion as operating expenses increased 3.0% to USD33.04 billion from USD32.07 billion.
The bank lifted its final dividend by 16% to USD0.36 per share from USD0.31 previously. The total dividend therefore amounted to USD0.87 per share, up 43% from USD0.61.
Additionally, HSBC said it intends to carry out a USD2 billion share buyback programme, which is expected to complete before the bank issues its first quarter 2025 results.
In 2025 the bank aims to reduce costs by approximately USD300 million and commits to an annualised reduction of USD1.5 billion in its cost base by the end of 2026.
Wednesday's UK corporate calendar has full-year results from defence manufacturer BAE Systems and miner Glencore.
A barrel of Brent rose to USD76.04 early Wednesday from USD75.66 at the time of the London equities close on Tuesday. Gold rose to USD2,933.89 an ounce from USD2,928.05.
By Eric Cunha, Alliance News news editor
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