17th Jan 2020 06:58
(Alliance News) - Stock prices in London are seen opening in the green on Friday, following record highs in the US and a solid session in Asia overnight.
IG futures indicate the FTSE 100 index will open 16.5 points higher at 7,626.31. The UK flagship index closed down 32.99 points, or 0.4%, at 7,609.81 on Thursday
China's economy weakened to its slowest pace of growth in three decades in 2019 as weaker domestic demand and trade tensions with the US took their toll, official data showed Friday.
The world's second-largest economy grew by 6.1% last year, its worst performance since 1990, according to the National Bureau of Statistics.
The figure matches an AFP analyst forecast and is within Beijing's official target of 6.0% to 6.5%. But last year's growth was down from 6.6% in 2018.
While China's economy had been gradually losing steam over the first three quarters, growth stabilised at 6.0% in the last three months of 2019 – the same pace as in the third quarter, according to the National Bureau of Statistics.
The Japanese Nikkei 225 index finished 0.5% higher on Friday. In China, the Shanghai Composite is up 0.1%, while the Hang Seng index in Hong Kong is 0.1% lower.
In the US on Thursday Wall Street ended higher, with the Dow Jones Industrial Average closing 0.9% higher, the S&P 500 0.8%, and the Nasdaq Composite 1.1%.
"While US markets have continued to get drawn ever higher, markets in Europe delivered a much more tepid response. The new record highs in the US and positive Asia session are likely to see a positive follow through for markets here in Europe later this morning," commented Michael Hewson at CMC Markets UK.
"A part of the reason for the underperformance of markets in Europe is the weak nature of any recovery in the region, and some concern that President Trump may well turn his attention to Europe on the trade front."
"If the EU was looking to maintain a low profile in this area, they certainly have a funny way of showing it after EU trade commissioner Phil Hogan criticised US trade policy as short termism, and focussed only on winning the upcoming election. He went on to suggest the EU might file a case at the WTO with respect to some of the terms of the deal," Hewson continued.
US threats to put tariffs on European automobiles did not come up during talks this week with US trade officials in Washington, EU Trade Commissioner Hogan said Thursday.
Hogan's remarks came hours after Germany's defence minister confirmed a media report Washington had threatened 25% duties on automobiles, demanding three EU nations increase pressure on Iran.
"It was not mentioned, it was hardly mentioned," Hogan told reporters in Washington. "I think it should be good news for Germany."
In other trade news, the US Senate on Thursday voted overwhelmingly to approve a new North American trade pact, handing Trump a second trade win in as many days just as his impeachment trial was set to begin.
After a brief debate, lawmakers voted 89-10 in favour of a bill allowing the US-Mexico-Canada agreement to take effect, overhauling trade relations among the three countries.
The bill faced some opposition – including from Democratic leader Chuck Schumer, who said it failed to address the threat of climate change – and Republican Pat Toomey of Pennsylvania, who complained it erected barriers to free trade.
Given that it was negotiated at his instigation, Trump's signature is not in doubt, however.
In early UK corporate news, miner Rio Tinto reported a mixed production result for 2019, with Pilbara iron ore shipments slipping.
In 2019, Pilbara iron ore shipments of 327 million tonnes were down 3% on 2018, hit by weather and operational challenges in the first half of the year at the Western Australia mine. This was, though, in line with the Anglo-Australian miner's guidance for output between 320 million to 330 million tonnes.
Looking ahead, Rio Tinto expects Pilbara iron ore shipments around 300 million to 343 million tonnes in 2020.
Aluminium production of 3.2 million tonnes was 2% lower than 2018, and mined copper production of 577,000 tonnes was down 5%.
Rio Tinto Chief Executive Jean-Sebastien Jacques said: "We finished the year with good momentum, particularly in our Pilbara iron ore operations and in bauxite, despite having experienced some operational challenges in 2019."
The UK corporate calendar on Friday has third-quarter results from credit checking agency Experian, currency manager Record, and Mr Kipling cake maker Premier Foods. There is also a trading statement from gaming firm GVC.
The economic calendar has UK retail sales at 0930 GMT and eurozone inflation at 1000 GMT.
By George Collard; [email protected]
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