20th Mar 2025 06:58
(Alliance News) - Stocks in London are set to open lower on Thursday ahead of the Bank of England's rate decision, as Asian stocks closed higher on Wednesday following China's decision to hold interest rates steady.
IG says futures indicate the FTSE 100 to open 8.90 points lower, 0.1%, at 8,697.76 on Thursday. The index of London large-caps closed up 1.43 points at 8,706.66 on Wednesday.
Late on Wednesday, FTSE 100 constituent Prudential announced strong annual profit growth, boosted by higher insurance revenue with robust performance across key Asian markets, prompting an increased dividend.
The insurance firm & asset manager said pretax profit increased 41% to USD2.95 billion in full-year 2024 from USD2.10 billion a year prior.
Basic earnings per share after tax were 84.1 US cents, up 35% from 62.1c.
Prudential announced a second interim dividend of 16.29 cents per share, up 15% from 14.21c. This increases the total dividend for the year by 13% to 23.13c from 20.47c.
The Bank of England is due to announce its interest rate decision at 1200 GMT, following the US Fed announcement on Wednesday.
"As expected, the FOMC held the target range for the fed funds rate steady at 4.25% - 4.50%, while also revising higher the near-term inflation profile, and lower near-term growth expectations. These forecast tweaks, though, didn’t move the median dot throughout the forecast horizon, which continues to point to 50bp of cuts both this year and next, and a ‘longer-run’ rate at 3%," said Pepperstone analyst Michael Brown.
Brown continued: "In the aftermath of the FOMC, though, markets reacted in a dovish fashion – stocks gaining ground, Treasuries advancing across the curve, and the dollar rolling over. All of this, though, smacked of participants that had been hedging hawkish policy risk unwinding their positions, as opposed to anything more fundamental, or any significant shifts in the policy outlook."
The Pepperstone analyst added: "Later in the day, the BoE should maintain Bank Rate at 4.50%, while reiterating a ‘gradual and careful’ approach to further policy normalisation, amid lingering upside inflation risks, with headline CPI set to rise towards 4% by the summer."
In the US on Wednesday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.9%, the S&P 500 trading 1.1% higher and the Nasdaq Composite gaining 1.4%.
In Asia on Thursday, the Nikkei 225 index in Tokyo was down 0.3%. In China, the Shanghai Composite was down 0.4%, while the Hang Seng index in Hong Kong was 1.7% lower.
The S&P/ASX 200 in Sydney, on the other hand, closed up 1.2%.
China's central bank also decided to leave its key lending rates unchanged on Thursday.
The People's Bank of China has maintained its 1-year loan prime rate at 3.1%, in line with FXStreet-cited consensus, while the 5-year LPR remains at 3.6%.
Kelvin Lam, senior China economist at Pantheon Macroeconomics, commented: "Recent economic activity data turned out better than the market had expected, with pockets of strength in retail sales and [fixed asset investment] growth, thanks to stimulus policies. Perhaps policymakers are thinking that this is not the optimal time to ease."
In addition, Chinese tariffs on Canadian products come into effect Thursday, with an industry lobby warning the new levies will have a "devastating impact" on farmers.
Rapeseed oil, oil cakes and peas imported from Canada will be hit with a 100% surcharge, while aquatic products and pork will face a 25% levy.
Ottawa in August placed 100% tariffs on Chinese electric vehicle imports – matching US measures seeking to fend off a flood of Chinese state-subsidised cars into North America.
Sterling was quoted at USD1.2991 early Thursday, higher than USD1.2974 at the London equities close on Wednesday.
The euro traded at USD0.9178 early Thursday, falling from USD1.0883 late Wednesday. Against the yen, the dollar was quoted lower at JPY148.24 versus JPY149.87.
President Donald Trump plans to sign an executive order on Thursday calling for the shutdown of the US Education Department, according to a White House official.
A White House fact sheet said the order would direct secretary Linda McMahon "to take all necessary steps to facilitate the closure [of] the Department of Education and return education authority to the States, while continuing to ensure the effective and uninterrupted delivery of services, programs, and benefits on which Americans rely".
The department sends billions of dollars a year to schools and oversees USD1.6 trillion in federal student loans.
Gold was quoted at USD3,049.91 an ounce early Thursday, higher than USD3,036.51 on Wednesday, as the yellow metal continues its upward trend.
Brent oil was trading at USD71.21 a barrel early Thursday, up from USD70.72 late Wednesday.
Thursday's corporate calendar will see full-year results releases from Energean and Bloomsbury Publishing.
Also in the economic calendar on Thursday, UK unemployment data will be released at 7000 GMT, at the same time as German producer price index inflation data. US weekly jobs claims figures will be out at 1230 GMT.
By Emily Parsons, Alliance News reporter
Comments and questions to [email protected]
Copyright 2025 Alliance News Ltd. All Rights Reserved.
Related Shares:
Prudential