13th Feb 2025 06:53
(Alliance News) - Stocks in London are set to open slightly higher on Thursday, ahead of UK economic data, as Russia-Ukraine peace deal hope gave stocks a boost.
Asian stocks were largely on the up, while overnight in New York, equities pared losses after a hotter-than-expected US inflation reading.
In focus early on Thursday will be UK gross domestic product data, as well as earnings from the likes of Barclays and Unilever.
IG says futures indicate the FTSE 100 to open 9.3 points higher, 0.1%, at 8,816.74 on Thursday. The index of London large-caps closed up 30.05 points, 0.3%, at 8,807.44 on Wednesday.
In New York on Wednesday, the Dow Jones Industrial Average lost 0.5%, the S&P 500 fell 0.3%, but the Nasdaq Composite ended marginally higher.
In Tokyo on Thursday, the Nikkei 225 added 1.3%, while in Sydney, the S&P/ASX 200 edged up 0.1%. The Shanghai Composite was down 0.2%, but the Hang Seng Index surged 2.2%.
Hotter-than-expected US inflation kept a lid on US stocks. According to the US Bureau of Labor Statistics, consumer prices rose 3.0% on-year last month, picking up speed from a 2.9% advance in December.
The pace of consumer price inflation had been expected to remain at 2.9% last month, according to FXStreet cited consensus, so the reading was hotter than expected.
XS.com analyst Antonio Di Giacomo commented: "The market had been anticipating potential interest rate cuts by the Federal Reserve to stimulate economic growth. However, the persistence of higher-than-expected inflation makes monetary easing in the short term more difficult. Investors now fear the Fed will maintain its restrictive policy longer than expected. This scenario generates increased volatility in financial markets, impacting the performance of other risk assets.
"Federal Reserve Chairman Jerome Powell reiterated that while inflation is approaching the 2% target, it has not yet reached a level that justifies rate cuts. This message further heightened market concerns, suggesting that rate reductions could be delayed until late 2025, depending on economic data trends. Powell's comments made it clear that the Fed needs to see more consistent signs of controlled inflation before shifting its stance."
Against the dollar, the pound rose to USD1.2496 early Thursday, from USD1.2415 at the time of the London equities close on Wednesday. The euro rose to USD1.0437 from USD1.0364. Against the yen, the greenback faded to JPY154.07 from JPY154.77.
A barrel of Brent fell to USD74.54 from USD75.81. Gold rose to USD2,914.31 an ounce from USD2,897.30.
US President Donald Trump and Russian President Vladimir Putin spoke by phone on Wednesday and agreed to begin negotiations to end the war in Ukraine "immediately."
The direct contact by the leaders of the rival powers - and the apparently warm words exchanged - could have potentially far-reaching implications for Ukraine, which has been fending off a full-scale Russian invasion for nearly three years with Washington's help.
Trump, writing on his Truth Social platform, described the call with Putin as "lengthy and highly productive," adding that they had also agreed to visit each other's countries.
The Kremlin confirmed the conversation, stating that Putin invited Trump to Moscow and expressed his readiness to receive White House representatives for discussions on the conflict.
SPI Asset Management Stephen Innes commented: "The market reaction was swift—oil took a 2.5% dive, the dollar lost steam, and Wall Street trimmed its losses as traders recalibrated their geopolitical risk models. If this push for peace gains traction, expect an even bigger unwind in war-premium assets and a fresh bid for riskier plays."
Thursday's UK corporate calendar sees full-year results from high street lender Barclays, tobacco seller BAT and Marmite and Ben & Jerry's owner, Unilever.
The economic calendar for Thursday has UK economic growth data at 0700 GMT and US PPI and weekly initial jobless claims figures at 1330 GMT.
The UK data is expected to show the economy shrunk 0.1% on-quarter in the final three months of 2024, according to FXStreet cited consensus.
By Eric Cunha, Alliance News news editor
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