20th Aug 2021 07:00
(Alliance News) - Stocks in London are called flat on Friday after Wall Street staged a small comeback on Thursday, but Asian markets suffered steep losses after a new move by the Chinese government to crack down on the tech sector.
IG futures indicate the FTSE 100 index is to open down 1.16 points at 7,057.70 on Friday. The blue-chip index closed down 110.46 points, or 1.5%, at 7,058.86 on Thursday.
Stocks in New York ended mixed on Thursday recovering from steep early losses, on a day that saw investors grapple with hawkish signals from the US Federal Reserve minutes and positive jobless claims figures.
The Dow Jones Industrial Average lost 0.2% and the S&P 500 shed 0.1%, but the Nasdaq Composite finished 0.1% higher.
The mood in the US was improved after President Joe Biden's administration announced steps on Thursday to allow US states to continue expanded unemployment benefits as the country grapples with a surge in the Delta variant of Covid-19, even as data showed jobless claims declined for a fourth straight week.
Congress approved a massive expansion of the unemployment safety net as the pandemic began last year, but after repeated extensions the programs are due to expire nationwide early next month.
States will be able to use money left over from the USD1.9 trillion American Rescue Plan approved in March to continue some of the jobless programs, Treasury Secretary Janet Yellen and Labor Secretary Marty Walsh said in a letter to top lawmakers.
In Asia, however, the mood was more sour.
In Tokyo, the Nikkei 225 index was down 1.0% on Friday. In China, the Shanghai Composite was 1.8% lower, while the Hang Seng index in Hong Kong was down 2.4%. The S&P/ASX 200 in Sydney was down 0.1%.
Stocks in Asia were unable to track the small gains seen in the US, with Beijing further tightening its grip on the tech sector.
China passed a sweeping privacy law aimed at preventing businesses from collecting sensitive personal data, as the country faces an uptick in internet scams, leaks and concerns about tech giants abusing clients' personal information.
Under the new rules passed by China's top legislative body on Friday, state-run and private companies handling personal information will be required to reduce data collection and obtain user consent.
The Chinese state security apparatus will maintain access to swathes of personal data, however, and Beijing has long been accused of harnessing big tech to accelerate repression in the northwestern Xinjiang province and elsewhere.
The new rules are expected to further rattle China's tech sector, with companies such as ride hailing giant Didi and gaming behemoth Tencent in regulators' crosshairs in recent months over misuse of personal data.
The law aims to protect those who "feel strongly about personal data being used for user profiling and by recommendation algorithms or the use of big data in setting [unfair] prices," a spokesman for the National People's Congress told state news agency Xinhua earlier this week.
In the UK, private equity firm Clayton, Dubilier & Rice has announced a new GBP7 billion bid for supermarket Wm Morrison Supermarkets.
The deal has been unanimously accepted by the board of the grocer and directors have said shareholders should vote in favour of the takeover at a meeting due in early October.
It means the company has withdrawn its recommendation for investors to accept a previous GBP6.7 billion takeover deal from a consortium led by rival private equity firm Fortress.
Last week, CD&R was given an extended deadline until Friday afternoon by takeover regulators to say whether it wants to make a new offer for Morrisons, or to walk away.
CD&R had originally been turned down by the Morrisons board over a potential GBP5.5 billion bid. In June, the board said the offer "significantly undervalued Morrisons and its future prospects". Since then CD&R has been pondering whether it should increase its bid for the supermarket chain.
The pound was quoted at USD1.3627 early Friday, down from USD1.3666 at the London equities close Thursday. The euro was priced at USD1.1687, flat from USD1.1685.
Against the Japanese yen, the dollar was trading at JPY109.66, soft from JPY109.75.
Brent oil was quoted at USD66.60 a barrel Friday morning, up from USD66.10 late Thursday. Gold was trading at USD1,786.10 an ounce, up against USD1,781.65
The economic events calendar on Friday has UK retail sales numbers and Germany producer prices, both at 0700 BST.
The UK corporate calendar on Friday has interim results from Irish building materials firm Kingspan Group.
By Paul McGowan; [email protected]
Copyright 2021 Alliance News Limited. All Rights Reserved.
Related Shares:
MRW.L