19th Mar 2026 06:55
(Alliance News) - Stocks in London are set to open sharply lower on Thursday, after fresh attacks over energy infrastructure in the Middle East rattled global markets and sent oil prices higher.
IG says futures indicate the FTSE 100 to open 100.4 points lower, 1.0%, at 10,204.89 on Thursday. The index of London large-caps closed 0.9% lower at 10,305.29 on Wednesday.
In the economic calendar, the UK unemployment rate for the three months to January is due at 0700 GMT, with consensus expecting 5.3% versus 5.2% in October to December.
Later in the day, both the Bank of England and the European Central Bank announce rate decisions, with both widely expected to hold rates steady.
Brent oil was trading at USD113.01 a barrel early Thursday, higher than USD108.21 late Wednesday, after Iran inflicted what it described as "extensive damage" on the site of the world's largest liquefied natural gas facility in Qatar.
Tehran said it launched a ballistic missile strike on Ras Laffan, a vast industrial complex housing QatarEnergy's LNG plants and a refinery, in retaliation for an attack on Iran's South Pars gasfield. Qatar's defence ministry said five missiles were fired, with four intercepted and one hitting the complex. QatarEnergy said the strike caused "extensive damage" but no injuries.
The attack marks a significant escalation in the Middle East conflict and poses major risks for global energy markets. Qatar is the world's second-largest LNG exporter and the largest supplier to Asia.
US President Donald Trump warned Iran against further retaliation, saying the US would "massively blow up" a major Iranian gas field if Qatar is attacked again. Trump also said Washington "knew nothing" about Israel's strike on South Pars.
South Pars forms part of the world's largest natural gas field, shared between Iran and Qatar. Iran has since launched strikes against several Gulf nations, including Qatar, Saudi Arabia and the UAE. Israel has yet to comment.
Sterling was quoted at USD1.3265 early Thursday, lower than USD1.3334 at the London equities close on Wednesday. Against the euro, sterling edged down to EUR1.1571 from EUR1.1577.
The euro traded at USD1.1465 early Thursday, lower than USD1.1517 late Wednesday. Against the yen, the dollar was quoted at JPY159.67 versus JPY159.45.
In the US on Wednesday, Wall Street ended sharply lower, with the Dow Jones Industrial Average down 1.6%, the S&P 500 down 1.4% and the Nasdaq Composite down 1.5%.
The US Federal Reserve left interest rates unchanged amid uncertainty caused by events in the Middle East. The Federal Open Market Committee voted 11-1 to keep the federal funds rate target range at 3.50% to 3.75%, as widely expected. Governor Stephen Miran dissented, arguing for a further quarter-point reduction.
In its statement, the Fed said economic activity has been expanding at a solid pace but noted that the implications of developments in the Middle East for the US economy remain uncertain. "Uncertainty about the economic outlook remains elevated," it added.
Despite this, officials still anticipate one rate cut in 2026 and another in 2027, unchanged from December projections. Of the 19 FOMC participants, seven expect rates to remain unchanged this year, one more than in December, while 12 foresee at least one cut.
Fed Chair Jerome Powell said he has no intention of leaving his post while a Department of Justice criminal investigation into the central bank is ongoing. Powell said the Fed had been served subpoenas in January related to renovations of buildings in Washington and his testimony about them. He added he has not yet decided whether he will serve out his term as a board member until January 2028. His term as chair ends in May, and he will serve as chair pro-tem until a successor is confirmed.
President Trump has nominated Kevin Warsh as Powell's successor, though the appointment has yet to be approved by Congress.
In Asia on Thursday, the Nikkei 225 index in Tokyo was down 3.5%, even as the Bank of Japan left its policy rate unchanged as expected. The policy board voted 8-1 to maintain the uncollateralized overnight call rate at around 0.75%, matching consensus. Takata Hajime was again the sole dissenter, calling for a 25 basis point hike to 1.0%.
In China, the Shanghai Composite was down 1.5%, while the Hang Seng index in Hong Kong fell 2.0%.
The S&P/ASX 200 in Sydney closed down 1.7%, as Australia's unemployment rate rose to 4.3% in February from 4.1% in January, above the 4.1% consensus, according to the Australian Bureau of Statistics.
Gold was quoted at USD4,797.78 an ounce early Thursday, lower than USD4,875.60 on Wednesday.
Back in London, the Bank of England is widely expected to hold rates on Thursday after expectations for a cut faded amid concerns that higher oil prices will fuel inflation.
There will be no press conference, and investors are likely to focus on the vote split and commentary in the minutes. In February, the BoE left bank rate unchanged at 3.75% by a narrow 5-4 majority, with Governor Andrew Bailey backing a hold after supporting a cut in December.
The European Central Bank is also expected to leave rates unchanged, though the recent surge in oil prices may prompt President Christine Lagarde to signal a more hawkish tone. The decision is due at 1315 GMT, followed by a press conference at 1345 GMT and updated macroeconomic projections.
In February, the ECB left the deposit facility rate at 2.00%, the main refinancing operations rate at 2.15% and the marginal lending facility at 2.40%, marking its fifth consecutive hold. Lagarde has said the central bank is in a "good place", with annual eurozone inflation at 1.9% in February, up from 1.7% in January and close to the 2% target.
In Thursday's corporate calendar, Atalaya Mining Copper, Central Asia Metals, Energean, Eurocell, Investacc Group and VH Global Energy Infrastructure report full-year results, while DFS Furniture posts half-year results.
In the economic calendar on Thursday, UK unemployment data, eurozone construction output, Ireland's trade balance, the UK interest rate decision, US weekly jobless claims, the ECB interest rate decision, and US new home sales and wholesale inventories are due.
By Eva Castanedo, Alliance News reporter
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