16th Jan 2026 06:55
(Alliance News) - Stocks in London are set to open lower on Friday, as investors weigh a pullback in Asian markets and brace for deeper scrutiny of tech earnings as reporting season gathers pace.
IG says futures indicate the FTSE 100 to open 12.9 points lower, 0.1%, at 10,226.04 on Friday. The index of London large-caps closed up 0.5% at 10,238.94 on Thursday.
Sterling was quoted at USD1.3379 early Friday, lower than USD1.3388 at the London equities close on Thursday.
The euro traded at USD1.1605 early Friday, marginally lower than USD1.1607 late Thursday. Against the yen, the dollar was quoted at JPY158.38, down from JPY158.48.
In the US on Thursday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.6%, the S&P 500 up 0.3% and the Nasdaq Composite up 0.3%.
Optimism may be tested as earnings season intensifies. Ipek Ozkardeskaya, senior analyst at Swissquote, said:
"As we dive into the heart of earnings season in the coming weeks, tech results will be scrutinised in far greater detail. Recall that last earnings season delivered blowout headline numbers from Big Tech, but in some cases those figures were wearing a bit of make-up.
"Concerns around circular AI deals, leverage and delayed returns on investment remain front of mind for investors. These are compounded by rising electricity and metals costs, higher memory-chip prices, and the risk of supply disruptions - including China's threats to restrict rare-earth exports amid geopolitical tensions involving Iran and Venezuela, where China has historically sourced oil.
"All of this suggests that this earnings season may not be a walk in the park. These "details" - or elephants in the room - will matter just as much as the shiny headline figures
Still, tech sentiment received a boost overnight after strong results from Taiwanese chipmaker TSMC. The company on Thursday posted a forecast-busting net profit for the fourth quarter, signalling sustained global demand for artificial intelligence technology.
Taiwan Semiconductor Manufacturing Co is the world's largest contract chipmaker, producing microchips used in everything from Apple smartphones to Nvidia's advanced AI hardware.
The firm has been a major beneficiary of the AI investment boom, which has seen technology giants pour billions into chips, servers and data centres.
While some market watchers fear the enthusiasm around AI could eventually burst, TSMC's results marked another high point for the company.
"Our conviction in the multi-year AI mega trend remains strong, and we believe the demand for semiconductors will continue to be very fundamental," TSMC Chair CC Wei said.
Trade developments also supported sentiment in the sector.
The US and Taiwan have reached an agreement to reduce tariffs on goods from the island while boosting Taiwanese investment into US technology industries, the US Commerce Department said.
Under the deal, Washington will lower tariffs on Taiwanese goods to 15%, while Taiwanese semiconductor and technology firms are set to make "new, direct investments totalling at least USD250 billion" in areas such as semiconductors and artificial intelligence.
Taiwan said it will remain the world's "most important" producer of AI chips, after reaching a trade deal with the US.
"Based on current planning, Taiwan will still remain the world's most important producer of AI semiconductors, not only for Taiwanese companies, but globally," Economic Affairs Minister Kung Ming-hsin said, with production capacity split about 85-15 between Taiwan and the US by 2030 and 80-20 by 2036.
In Asia on Friday, the Nikkei 225 index in Tokyo was down 0.3%. In China, the Shanghai Composite was down 0.1%, while the Hang Seng index in Hong Kong was down 0.6%. The S&P/ASX 200 in Sydney closed up 0.5%.
Gold was quoted at USD4,597.60 an ounce early Friday, lower than USD4,616.76 on Thursday.
Brent oil was trading at USD63.50 a barrel early Friday, marginally lower than USD63.55 late Thursday.
In Friday's corporate calendar, Johnson Service Group, MJ Gleeson and Ninety One are due to release trading statements.
In the economic calendar on Friday, Germany consumer price inflation data and US industrial production figures are scheduled.
By Eva Castanedo, Alliance News reporter
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