20th Sep 2024 06:54
(Alliance News) - Stocks in London are set to open lower on Friday, returning some of the advance it made following the Bank of England decision, and despite a stronger day on Wall Street overnight.
IG says futures indicate the FTSE 100 to open 51.3 points lower, 0.6%, at 8,277.42 on Friday. The index of London large-caps rose 75.04 points, or 0.9%, at 8,328.72 on Thursday.
In New York on Thursday, the Dow Jones Industrial Average added 1.3%, the S&P 500 jumped 1.7% and the Nasdaq Composite soared 2.5%.
"A distinct risk-on vibe dominated markets yesterday, as participants continued to digest the FOMC's 50bp cut earlier in the week, with said cut providing a fillip to sentiment as the dust continued to settle. Such was the extent of the positive risk mood that the S&P 500 rallied almost 2%, notching its first record close since July, while the Nasdaq gained just shy of 3% on the day," Pepperstone analyst Michael Brown commented.
The Bank of England left rates unmoved on Thursday, despite the Fed's bumper on Wednesday. It kept bank rate at 5.00%. The pound strengthened, rising above the USD1.33 mark at one point.
The pound was quoted at USD1.3293 early Friday in London, from USD1.3268 at the time of the European equities close on Thursday. The euro stood at USD1.1164, up from USD1.1145. Against the yen, the dollar was trading at JPY142.15, down from JPY142.94.
The Bank of Japan left interest rates unchanged on Friday, after a decision to hike them in July pushed the yen sharply higher and fuelled turmoil across world markets.
Two days after the US Federal Reserve slashed rates for the first time since the start of the pandemic, the BoJ's stasis came as data showed inflation in the world's fourth-largest economy picked up as expected in August.
Japanese central bank officials said borrowing costs would be left at 0.25%, a policy decision widely predicted after the fallout from the previous hike.
The BoJ was for a long time an outlier among major central banks – sticking to an ultra-loose monetary policy in an attempt to see demand-driven inflation of 2% fuelled by wage increases.
Numbers on Friday showed the rate of annual consumer price inflation picked up to 3.0% in August, from 2.8% in July. Excluding fresh food, the pace of yearly price growth accelerated to 2.8% from 2.7%.
The People's Bank of China, meanwhile, unexpectedly left its one-year loan prime rate unchanged at 3.35%.
According to FXStreet cited consensus, the move was expected. However, Reuters reported that a majority of the 39 market participants it surveyed this week predicted a cut.
The over-five-year LPR was kept unmoved at 3.85%.
In Tokyo, the Nikkei 225 was up 1.7%. In China, the Shanghai Composite was down 0.6%, though the Hang Seng in Hong Kong was up 0.9%. The S&P/ASX 200 was flat in late trade.
Brent oil was quoted at USD74.57 a barrel early Friday, from USD75.05 at the time of the London equities close on Thursday. Gold climbed to USD2,594.59 an ounce from USD2,585.15.
Friday's economic calendar has UK retail sales data at 0700 BST.
By Eric Cunha, Alliance News news editor
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