2nd Nov 2020 06:58
(Alliance News) - Stock prices in London are seen opening lower, following news that England will enter a full lockdown, amid a raft of manufacturing PMI readings on Monday and before the US heads to the polls on Tuesday.
In London, IG futures indicate the FTSE 100 index is to open 20.2 points lower at 5,557.07. The blue-chip index closed 4.48 points lower at 5,577.27 on Friday.
Pubs, bars, restaurants and non-essential retail across England will close from Thursday, UK Prime Minister Boris Johnson announced on Saturday, and people will be told to stay at home unless they have a specific reason to leave, but schools, colleges and nurseries will remain open.
People will be allowed outside to exercise and socialise in public spaces outside with their household or one other person, but not indoors or in private gardens, and will be able to travel to work if they cannot work from home. Furlough payments at 80% will be extended for the duration of the restrictions as high streets once again shut up shop.
The pound was quoted at USD1.2904 early Monday, down from USD1.2952 at the London equities close Friday.
Still to come in the economic calendar for Monday, there are manufacturing purchasing managers' index readings from Germany, the eurozone, the UK and the US at 0855 GMT, 0900 GMT, 0930 GMT and 1445 GMT respectively.
"Economic activity is likely to dip on account of the tighter restrictions, and that will probably be the theme of the markets in the near-term. The health crisis is ratcheting up in terms of new Covid-19 cases and hospitalisation rates, and there is a sense things are going to get worse before they get better. Medical experts where claiming since the beginning of the health crisis that the virus is likely to resurface in winter, but nonetheless, hear we are and dealers have been rattled by the situation," CMC Markets analyst David Madden said.
Data already out showed Japan's manufacturing sector improved marginally in October but remained in contraction levels.
IHS Markit said the au Jibun Bank manufacturing PMI reading was 48.7 points last month, up from 47.7 points in September. A reading above 50 signals expansion, while a reading below shows contraction.
China's manufacturing growth picked up pace in October, meanwhile, IHS Markit data showed.
"The PMI reading rose to 53.6 in October, from 53.0 in September. Supporting the higher PMI figure was a sharper increase in total new work during October. The latest upturn in overall sales was the sharpest since November 2010, with panellists widely commenting that market conditions continued to recover from the Covid-19 pandemic earlier in the year," IHS Markit said.
In Asia, Japan's Nikkei 225 closed 1.4% higher on Monday. In China, the Shanghai Composite was marginally lower in late trade and the Hang Seng index in Hong Kong was up 1.2%.
Against the dollar, the euro slipped to USD1.1638 from USD1.1649 at the European equities close Friday. Versus the Japanese yen, the dollar rose to JPY104.71 compared USD104.56
In the US on Friday, the Dow Jones Industrial Average shed 0.6%, the S&P 500 lost 1.2% and the Nasdaq Composite ended 2.5% lower.
"The US presidential election is tomorrow, and it will be the talk of the town. Joe Biden of the Democrats is performing better in the polls, but in key swing states, President Trump has eaten into Biden’s lead. It was reported there was a record level of early voting, and that underlines the intensity of the election," CMC's Madden added.
Polling stations in the US open on Tuesday.
Brent oil prices continued to hit by Covid-19 lockdowns. A barrel of the North Sea benchmark fetched USD36.74 early Monday, down from USD37.68 a barrel at the London market close Friday.
Gold was quoted at USD1,883.56, up from USD1,879.42.
In the UK corporate calendar on Monday is a trading statement from insurer Hiscox.
Already out, budget carrier Ryanair posted a 78% drop in revenue in the first half ended September. Revenue came in at EUR1.18 billion from EUR5.39 billion a year before, and the airline swung to a pretax loss of EUR432.3 million from a EUR1.26 billion profit.
Customer numbers were 80% lower at 17.1 million, demonstrating the hit Ryanair has taken from Covid-19 travel restrictions.
"The group expects to carry approximately 38 million passengers in financial 2021, although this guidance could be further revised downwards if EU governments continue to mismanage air travel and impose more uncoordinated travel restrictions or lock downs this winter. The group expects to record higher losses in H2 than in H1," Ryanair said, looking ahead.
By Eric Cunha; [email protected];
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