18th Jan 2019 07:01
LONDON (Alliance News) - Stock prices in London are seen opening higher on Friday, with markets optimistic after a newspaper report that the US is set to ease some of its Chinese tariffs.
IG futures indicate the FTSE 100 index is to open 33.5 points higher at 6,866.80. The blue-chip index closed down 27.76 points, or 0.4%, at 6,834.92 on Thursday.
The Japanese Nikkei 225 index closed 1.3% higher Friday. In China, the Shanghai Composite is up 1.5% in late trade, while the Hang Seng index in Hong Kong is 1.3% higher.
"A report the US might consider easing some trade tariffs against China, in a sign of good faith in the ongoing trade negotiations, caused markets to finish the session strongly," said CMC Markets UK's Michael Hewson.
"These reports suggested Treasury Secretary Steve Mnuchin was pushing the idea, though chief trade negotiator Robert Lighthizer was lukewarm at best on it."
"While there hasn't been any solid confirmation that this might happen one way or the other, the mere prospect of further progress was enough to propel US markets to new one-month highs," Hewson continued."
"This in turn should help markets here in Europe open higher this morning."
On Thursday, the Wall Street Journal reported US officials are "debating ratcheting back tariffs" as a way to bring some calm to markets and give China an incentive to make further concessions.
In the US on Thursday Wall Street ended in the green, with the Dow Jones Industrial Average ending 0.7% higher, the S&P 500 0.8% higher, and the Nasdaq Composite up 0.7%.
President Donald Trump has retaliated against his rival, Speaker of the House Nancy Pelosi, saying he was postponing her planned trip to Belgium and Afghanistan, citing the ongoing partial shutdown of the US federal government.
Shortly thereafter, the White House said the US administration's delegation to the World Economic Forum in Davos would not head to Switzerland for the annual gathering of world leaders and business elites next week.
The measures add to the turmoil of the shutdown, which is now in its fourth week, with no sign of it ending, despite increasing warnings about the impact on the economy and the functionality of the federal government.
UK Prime Minister Theresa May also has cancelled her planned attendance at Davos, as she battles to save her Brexit deal.
"She won't be going to Davos," a Downing Street spokeswoman told dpa by telephone. "She will be staying to deal with other issues here."
Other government officials will still represent the UK in Davos, the spokeswoman added.
In the UK on Friday are retail sales figures for December at 0930 GMT.
"In November UK retail sales surged 1.4%, surpassing the most optimistic of expectations, largely as a result of Black Friday promotions and discounting," noted CMC's Hewson.
"The picture for December is unlikely to be anywhere near as good and given other similar surveys its quite likely that any spending could well have been left quite late, if it came at all," he continued.
"Expectations for December retail sales are for a decline of 0.8%, which given the 0.5% decline in October would mean consumer spending may well have slowed quite markedly in the fourth quarter."
London Capital Group's Jasper Lawler said, however: "The pound could find it continues to be supported with the release of retail sales data.
The pound was higher quoted at USD1.2967 early Friday, compared to USD1.2920 at the London equities close on Thursday.
In early UK corporate news, Rio Tinto said it had a "pleasing" operational performance in the last quarter of 2018, with copper production a particular highlight.
Pilbara iron ore shipments of 87.4 million tonnes in the fourth quarter were down 3% on a year ago, but 7% higher than the third quarter of 2018. For 2018 as a whole, shipments totalled 338.2 million tonnes, up 2% on 2017.
Bauxite production in 2018 of 50.4 million tonnes was down 1% on last year, while aluminium production of 3.5 million tonnes was down 3%. Mined copper was up 33% year-on-year at 633,500 tonnes and titanium dioxide slag was down 15% at 1.1 million tonnes.
Aluminium output fell due to ongoing labour disruptions at the non-managed Becancour smelter in Canada, Rio Tinto said, while copper came in above guidance due to a strong performance Escondida in Chile and higher grades at Rio Tinto Kennecott in Utah.
The UK corporate calendar on Friday has trading statements from construction company Henry Boot, currency manager Record and sandwich maker Bakkavor.
The international economic events calendar on Friday has eurozone current account numbers at 0900 GMT.
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