2nd Aug 2024 06:54
(Alliance News) - London's FTSE 100 is to open flat on Friday, struggling to mount a recovery after a sharp fall on Thursday, after poor data weighed on US stocks.
IG says futures indicate the FTSE 100 to open 0.4 of a point lower at 8,282.96 on Friday. The index of London large-caps closed down 84.62 points, 1.0%, at 8,283.36 on Thursday.
The pound was quoted at USD1.2727 early Friday, struggling in the wake of a Bank of England rate cut, from USD1.2771 at the time of the London equities close Thursday. The euro stood at USD1.0797, up from USD1.0787. Against the yen, the dollar was trading at JPY149.24, down from JPY150.09.
In New York on Thursday, the Dow Jones Industrial Average sank 1.2%, the S&P 500 fell shed 1.4% and the Nasdaq Composite slumped 2.3%.
"Those involved in the US session have had to navigate a real old-fashioned anti-cyclical risk aversion day, and it has got a little moody out there in the markets," Pepperstone analyst Chris Weston commented.
"One could argue that the Federal Reserve planted a seed yesterday, by moving its focus so much more to the labour market, which screams out - and has all but confirmed - that their models see the US economy in the late stages of the business cycle. As such, market players, and algo’s are positioned far more sensitively to the marquee growth economic data points and labour market readings and will react more intently to the macro over earnings."
US markets were knocked by data which suggested a worsening situation for manufacturing, and showed a stronger-than-forecast weekly jobless claims figures.
The ISM manufacturing PMI fell to 46.8 in July from 48.5 in June.
This was led by a worsening contract in new orders, while production also continued to decline. Prices continued to rise, however, and backlog remained at the same level of contraction.
In addition, the S&P Global US manufacturing purchasing managers' index fell to 49.6 points in July from 51.6 in June. It was a touch above the flash estimate of 49.5.
Figures showed US initial jobless claims were higher than expected in the week just gone.
New claims picked up to 249,000 in the week ended July 27, from 235,000 a week prior. The prior reading was unrevised.
The latest reading topped the FXStreet cited consensus of 236,000.
Friday's economic calendar sees the US jobs report at 1330 GMT. The nonfarms payrolls data is expected to show the pace of hiring eased to 175,000 in July, from 206,000 in June, according to FXStreet cited consensus.
Stocks were lower in Asia. The Nikkei 225 in Tokyo plunged 5.0%, with factors such as a stronger yen and sharp falls for chip titans, tracking their US counterparts, weighing on the index. Among them, Tokyo Electron shed 11%.
In New York, Intel plunged 19% in after hours trade. It announced plans to axe 15% of its workforce and suspend its dividend after a disappointing second quarter.
The Santa Clara, California-based chip maker said the actions would mean operating expense and capital expenditure reductions of more than USD10 billion in 2025 compared to previous estimates.
In the second quarter, Intel posted a net loss of USD1.65 billion, swinging from net income of USD1.47 billion a year prior. Revenue fell to USD12.83 billion from USD12.95 billion.
In China, the Shanghai Composite was down 0.6%, while the Hang Seng index in Hong Kong was down 2.5%. The S&P/ASX 200 in Sydney traded down 2.2%.
Brent oil was quoted at USD80.01 a barrel early Friday, down from USD80.48 at the time of the closing bell in London on Thursday. Gold rose to USD2,458.11 an ounce, from USD2,448.60.
By Eric Cunha, Alliance News news editor
Comments and questions to [email protected]
Copyright 2024 Alliance News Ltd. All Rights Reserved.