25th Oct 2024 06:53
(Alliance News) - London's FTSE 100 is called to open flat on Friday, making a weekly loss for the large-cap index likely, as equities have been held back US election uncertainty and pre-UK budget nerves.
IG says futures indicate the FTSE 100 to open just 1.3 points lower at 8,268.08 on Friday. The index of London large-caps closed up 10.74 points, or 0.1%, at 8,269.38 on Thursday. It is down 1.1% so far this week.
The pound was quoted at USD1.2967 early Friday, up from USD1.2955 at the time of the London equities close on Wednesday. The euro stood at USD1.0824, up from USD1.0799. Against the yen, the dollar was trading at JPY151.60, down from JPY151.84.
Taxes and borrowing are both set to increase in the UK, as Chancellor Rachel Reeves signalled she would rewrite the way government debt is measured in her first budget.
Labour's 2024 election manifesto said Reeves would follow two rules: The current budget would be in balance so that day-to-day costs are met by revenues.
The second rule is that debt must be falling as a share of the economy by the fifth year of the economic forecast.
On Thursday, she confirmed that the way debt is measured as part of that target would be changed to allow greater flexibility.
She is expected to target public sector net financial liabilities as her new benchmark for government debt rather than the current measure of underlying public sector net debt.
A shift to PSNFL would give her greater headroom to meet her debt reduction target, because it includes a wider mix of state assets and liabilities – notably including expected student loan repayments to offset some of the liability.
In New York on Thursday, the Dow Jones Industrial Average lost 0.3%, but the S&P 500 rose 0.2% and the Nasdaq Composite climbed 0.8%.
In Asia on Friday, the Nikkei 225 index in Tokyo was down 0.9%. In China, the Shanghai Composite was up 0.6%, while the Hang Seng index in Hong Kong was 0.7% higher. The S&P/ASX 200 in Sydney closed up 0.1%.
"Asian equity markets found some relief as US yields took a breather, though Japan wasn't as fortunate, with a stronger yen weighing on local shares," SPI Asset Management analyst Stephen Innes commented.
Brent oil was quoted at USD74.25 a barrel, fading from USD74.48 at the time of the London equities close on Thursday. Gold slipped to USD2,727.61 an ounce from USD2,729.94
Friday's economic calendar has a US durable goods order reading at 1330 BST.
Already out, consumer confidence in the UK has fallen again amid further worsening sentiment around the upcoming autumn budget, according to a long-running survey.
GfK's consumer confidence index fell one point in October to minus 21, as people's predictions for the general economy worsened over the coming year despite a slight improvement in their forecasts for personal finances.
The drop was significantly less than the seven-point plunge in September. Experts said that was also driven by Labour's gloomy messaging around the spending statement in late October.
Neil Bellamy, consumer insights director at GfK, said consumers are still in a "despondent mood" despite a recent fall in the headline rate of inflation.
He added: "This month's consumer confidence barometer paints a picture of people holding their breath to see what's in store for them on October 30."
The local corporate calendar sees third quarter results from high street lender NatWest and Africa-focused telecommunications firm, Airtel Africa.
By Eric Cunha, Alliance News news editor
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