10th Oct 2024 06:53
(Alliance News) - Stocks in London are set to open in the green on Thursday, while shares in Hong Kong and Shanghai powered higher, on supportive measures by the People's Bank of China.
IG says futures indicate the FTSE 100 to open 24.9 points higher, 0.3%, at 8,268.84 on Thursday. The index of London large-caps closed up 53.13 points, 0.7%, at 8,243.74 on Wednesday.
In Tokyo, the Nikkei 225 was up 0.3%, while in Sydney, the S&P/ASX 200 climbed 0.4%. In China, the Shanghai Composite rose 2.6%, while the Hang Seng in Hong Kong added 3.8%.
China's central bank boosted support for markets Thursday by opening up tens of billions of dollars in liquidity for firms to buy stocks as part of a raft of measures by Beijing to kickstart the country's flagging economy.
The People's Bank of China fleshed out plans to encourage "the healthy and stable development of the capital market" by opening up a "swap facility" worth CNY500 billion, some USD70.6 billion, that will allow firms to access cash to buy stocks.
Companies will be allowed to use equities, bonds and other assets as collateral for "high-grade liquid assets such as treasury bonds and central bank bills", it said.
The programme may be "further expanded depending on the situation", it added.
In New York, the Dow Jones Industrial Average rose 1.0% on Wednesday. The S&P 500 added 0.7%, while the Nasdaq Composite added 0.6%.
The US Federal Reserve is likely to make one or two more rate cuts this year as it recalibrates policy to focus on the labour market, a senior bank official said Wednesday.
Speaking in the US state of Idaho on Wednesday, San Francisco Fed President Mary Daly said she had backed a larger cut last month in order to "recalibrate" monetary policy.
"I think that two more cuts this year, or one more cut this year, really spans the range of what is likely in my mind, given my projection for the economy," Daly said.
But she cautioned that the Fed was "data-dependent," and policy would continue to be guided by the incoming data on inflation and the health of the labour market.
Federal Reserve officials were divided over how fast to lower interest rates before ultimately deciding on a 50 basis points cut, minutes published on Wednesday showed.
At the September meeting of the Federal Open Market Committee, the Federal Reserve lowered interest rates by 50 basis points, easing monetary policy for the first time in four years, citing progress on the Fed's dual mandate. This lowered the interest rate target to a range of 4.75% to 5.00%.
While only one FOMC member, Governor Michelle Bowman, voted against the half-point cut, others mulled whether a smaller 25bp cut was more appropriate, citing solid economic growth and low unemployment.
In the end a "substantial majority" of participants supported lowering the target range for the federal funds rate by 50 basis points, the minutes showed.
Thursday's economic calendar has a US inflation reading at 1330 BST.
Against the dollar, the pound faded to USD1.3071 early Thursday, from USD1.3080 at the time of the London equities close on Wednesday. The euro slipped to USD1.0939 from USD1.0948. Versus the yen, the dollar rose to JPY149.30 from JPY149.23.
An ounce of gold rose to USD2,614.98 from USD2,613.66. A barrel of Brent fetched USD76.99, up from USD76.54.
Thursday's UK corporate calendar has annual results from energy-efficient indoor air quality solutions firm Volution Group.
By Eric Cunha, Alliance News news editor
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