10th Mar 2025 06:58
(Alliance News) - Stocks in London are set to open higher on Monday, shaking off mixed trade in Asia after a tepid China inflation reading.
IG says futures indicate the FTSE 100 to open 25.8 points higher, 0.3%, at 8,706.00 on Monday. The index of London large-caps closed down just 2.96 points at 8,679.88 on Friday. It lost 1.5% last week.
The pound faded to USD1.2913 early Monday from USD1.2920 at the time of the London equities close on Friday. The euro slipped to USD1.0837 from USD1.0851. Against the yen, the dollar was at JPY147.72, up from JPY147.34.
Brent oil fell to USD70.10 a barrel from USD70.47 and gold slipped to USD2,912.33 an ounce from USD2,914.44.
In China on Monday, the Shanghai Composite fell 0.2%, while the Hang Seng Index in Hong Kong dropped 1.8%. In Tokyo, the Nikkei 225 added 0.4% and the S&P/ASX 200 in Sydney rose 0.2%.
China's consumer price index fell 0.7% in February, according to data released on Sunday by China's National Bureau of Statistics.
This is the first time in a year that the consumer price index has sunk to deflationary territory, and represented a steeper decline than the 0.4% forecast by a Bloomberg survey.
It also reversed the 0.5% uptick recorded in January, when a surge in spending during the Lunar New Year boosted inflation to its highest rate in months.
China has been battling falling consumption rates since the end of the pandemic. Adding to the pressure is US President Donald Trump's introduction of sweeping tariffs on Chinese products.
"Monday kicks off with the same old deflationary drumbeat as China's consumer inflation took a deeper dive than expected, slipping below zero for the first time in over a year. The data only reinforces what's been clear for months—deflationary pressures remain firmly entrenched in the world's second-largest economy," SPI Asset Management analyst Stephen Innes commented.
"Now, all eyes turn to whether Beijing's stimulus efforts will finally show up in stronger domestic demand or if this latest round of economic support is just another drop in an already leaky bucket. Until then, investors are left sifting through the noise, trying to determine if China's economic engine has any real momentum or if it's still stuck in neutral."
In New York, the Dow Jones Industrial Average added 0.5% on Friday. The S&P 500 rose 0.6% and the Nasdaq Composite climbed 0.7%.
US Federal Reserve Chair Jerome Powell flagged high uncertainty Friday surrounding President Trump's economic policies and their effects, but maintained that the central bank need not rush to adjust interest rates.
"It is the net effect of these policy changes that will matter for the economy and for the path of monetary policy," Powell told a forum in New York.
"We do not need to be in a hurry, and are well positioned to wait for greater clarity."
Powell maintained that the US economy remains in a good position, adding it has been growing at a solid pace.
He said the Fed is focused on separating signal from noise when it comes to the impact of policies.
XS analyst Antonio DiGiacomo commented: "Market analysts have pointed out that the combination of an uncertain labour outlook and fluctuating tariff policies could impact consumer and business confidence. As companies face potentially higher import costs, they may be forced to pass those costs on to consumers, increasing inflationary pressure in the coming months.
"Meanwhile, the Federal Reserve faces the challenge of balancing its monetary policy amid these economic factors. While weaker labour data could justify a more cautious approach to interest rates, inflation remains a key concern. Powell and his team will have to carefully assess their next moves to avoid an excessive economic slowdown."
Monday's economic calendar has a German industrial output reading at 0700 GMT.
Monday's UK corporate calendar has annual results from shipping and offshore services provider Clarkson.
By Eric Cunha, Alliance News news editor
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