9th Sep 2015 06:03
LONDON (Alliance News) - UK shares are set to open higher Wednesday, with Chinese stocks rallying on expectations of further stimulus measures by the country's authorities, as London investors also focus on UK industrial and manufacturing production data, due at 0930 BST.
IG says futures indicate the FTSE 100 to open higher at 6,217.70. The index closed up 1.2% at 6,146.10 on Tuesday pushed higher by insurers and miners.
In Asia on Wednesday, the Japanese Nikkei 225 trades up 6.3%, wiping out the losses seen on Tuesday.
Japan's consumer confidence improved by more than expected in August after falling in the previous month, survey data from the Cabinet Office showed Wednesday. The consumer confidence index rose by 1.4 points to 41.7 in August from 40.3 in July. Economists had expected the index to increase slightly to 40.5.
In China, the Hang Seng is up 3.4% and the Shanghai Composite is up 2.3%.
"Yesterday?s rebound has continued in Asia this morning with strong gains there as investors speculate that Chinese authorities will continue to ramp up their recent stimulus measures with further action in the coming days," said CMC Markets Chief market analyst Michael Hewson.
"According to a [China's] Ministry of Finance statement late Tuesday investment in major construction projects will be brought forward with the help of private financing. Some income tax changes to dividends were also announced to encourage long term investment in Chinese shares," wrote Hewson.
The economic forum known as the Summer Davos kicked off Wednesday in the northeast Chinese city of Dalian. Over 1,700 business leaders, political figures and entrepreneurs from 90 countries gathered to discuss new growth strategies at the World Economic Forum's Annual Meeting of the New Champions. Co-hosted by China and running from September 9 to 11, the event comes amid mounting fears of a sharp downturn in the world's second-largest economy.
Ahead of Thursday?s Bank of England Monetary Policy Committee announcement and the publication of the last meeting's minutes, Lloyds Bank said it looks for a relatively soft report for official July UK manufacturing and industrial production.
"After the 0.2% month-on-month rise in manufacturing output in June, we expect renewed sluggishness in July, reflecting in part sterling?s strength in recent months, and have pencilled in a flat outturn," said Lloyds. "Month-on-month growth for overall industrial production in July could be slightly negative, weighed down also by weak oil and gas output."
The bank also said that these forecasts suggest that the BoE's monetary policy will remain firmly on hold for now.
Wall Street ended higher Tuesday, re-opening after a holiday on Monday, with the DJIA up 2.4%, the S&P 500 up 2.5% and the Nasdaq Composite up 2.7%.
In the UK corporate calendar Wednesday, Barratt Developments and Hargreaves Lansdown release full-year results.
Sports Direct International issues an interim management statement and holds its annual general meeting. The Financial Times reported Tuesday that Royal London Asset Management is set to vote against the re-election of Sports Direct founder Mike Ashley as executive deputy chairman at the AGM.
Royal London said it has lost confidence in the company's board and would vote against Ashley's re-election for the first time. Ashley Hamilton Claxton, corporate governance manager at Royal London, one of the City's most prominent institutional investors, said the investment manager is "very concerned about the long list of corporate governance failings that have not been addressed."
Meanwhile, MartinCo, Advanced Medical Solutions Group and Dalata Hotel Group publish half-year results. Monitise and Mattioli Woods will release full-year results
In the economic calendar, in the US, before the JOLTS job openings data, due at 1500 BST, the Redbook index is due at 1355 BST.
By Daniel Ruiz; [email protected]
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