26th Jul 2021 07:00
(Alliance News) - Equities in London are seen opening lower on Monday, as the latest US Federal Reserve interest rate decision on Wednesday and corporate earnings from Wall Street's technology sector come into focus this week.
IG futures indicate the FTSE 100 index is to open 36.0 points, or 0.5%, lower at 6,991.58. The blue-chip index closed up 0.9%, or 59.28 points at 7,027.58 on Friday.
"Today's European open looks set to be a soft one, with Asia markets starting the week mixed on the back of weakness in Chinese stocks which have fallen sharply after a crackdown by Chinese regulators on its tech and education sector," CMC Markets analyst Michael Hewson commented.
In China, the Shanghai Composite was down 2.6%, while the Hang Seng index in Hong Kong was 3.2% lower. The Nikkei 225 was up 0.9%, the index playing catch up after markets in Tokyo were closed on Thursday and Friday last week. The S&P/ASX 200 was up 0.1% in Sydney.
In Hong Kong, Tencent shares were 7.7% lower. It must relinquish its exclusive music label rights, China's market regulator said Saturday, after finding that the firm had violated antitrust laws.
The ruling is the latest in a crackdown on China's tech sector after years of runaway growth, as Beijing frets over the companies' growing influence as well as the security of troves of sensitive consumer data.
Tencent acquired a majority stake in rival China Music Group in 2016, effectively controlling more than 80% of exclusively held music streaming rights in the domestic market, the State Administration for Market Regulation said in a statement.
The biggest players in China's tech sector – after years of growth thanks to lax regulation – are now facing increased scrutiny.
Also in Hong Kong, Baidu dropped 6.6% and Alibaba shed 6.3%.
In the US on Friday, the Dow Jones Industrial Average closed up 0.7% at 35,061.55, finishing above 35,000 points for the first time. The S&P 500 and Nasdaq Composite both added 1.0%.
OANDA analyst Jeffrey Halley commented: "There was no bipartisan agreement on a US infrastructure package over the weekend, with voting scheduled to commence tomorrow in the Senate meaningfully. It, along with the looming federal debt ceiling, is being almost entirely ignored by US markets."
Halley noted attention will be firmly on this week's Fed meeting as well as earnings from the likes of Apple, Amazon, Facebook and Google owner Alphabet.
"Big tech earnings are likely to have a more significant impact in that so much good news is baked into prices that earnings that undershoot or come in just on target will likely see some harsh short-term punishment to stocks prices," Halley said.
The UK corporate calendar has interim results from recruiter RTC Group and a trading statement from food producer Cranswick.
Already out, Ryanair posted a sharp revenue hike in its first quarter, as the carrier served 7.6 million more customer than a year prior.
In the three months ended June 30, revenue jumped to EUR371 million from EUR125 million a year before, but its net loss stretched year-on-year to EUR273 million from EUR185 million.
Ryanair's customer numbers totalled 8.1 million, a sharp hike from 500,000 from the Covid-hit first quarter of financial 2021.
It sees full-year traffic between 90 million and 100 million, shifted from its previous forecast which was at the lower end of an 80 million to 120 million range. It tips an annual result "somewhere between" a small loss and breakeven.
"We are seeing a strong rebound of pent-up travel demand into August and September and we expect this to continue into the second half of FY22, with pre-Covid-19 growth planned to resume strongly in summer 2022," Ryanair said.
Sterling was trading USD1.3756 early Monday in London, up slightly from USD1.3754 late Friday. The euro fetched USD1.1782, up from USD1.1763. Against the yen, the dollar slipped to JPY110.28, from JPY110.53.
Brent oil was trading at USD73.33 a barrel early Monday, down from USD73.64 at the London equity market close on Friday. Gold was trading at USD1,808.65 an ounce, up from USD1,800.34.
By Eric Cunha; [email protected]
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