24th Sep 2018 07:04
LONDON (Alliance News) - Stocks in London are set to open lower on Monday as the latest raft of US tariffs on China come into effect, with focus in the UK on Brexit developments following the sour EU meeting in Salzburg last week.
IG said futures indicate the FTSE 100 index of large-caps to open 30.23 points lower at 7,460.00 on Monday. The FTSE 100 index closed up 1.7%, or 122.91 points, at 7,490.23 on Friday.
"European markets look set to turn lower at the start of trading on Monday. The new US and Chinese tariffs take effect today so traders in Asia and Europe look cautious," commented Jasper Lawler, head of research at London Capital Group.
He added: "The real test will be when the Dow Jones opens this afternoon. US stock market bulls will try to push further into record high territory. It has taken the Dow the best part of eight months to make a record high this year. The risk is that investors who have ridden out eight months of losses at the hopes of getting back to new highs start to book profits."
In the US on Friday, Wall Street ended mixed, with the Dow Jones Industrial Average ending up 0.3%, having hit an all-time high of 26,769.19 during the session. The S&P 500 ended flat, however, and the Nasdaq Composite shed 0.5%.
Sterling was quoted at USD1.3073 early Monday, flat compared to USD1.3072 in London late Friday as the pound tumbled from USD1.3265 at the equities close on Thursday due to 'no-deal' Brexit worries.
On Monday, Theresa May is to meet senior ministers as she battles to save her Chequers blueprint for Brexit following last week's humiliating rebuff by EU leaders.
The UK prime minister will chair a meeting of the Cabinet in Downing Street on Monday amid intense pressure to change course and seek a simpler, less ambitious deal. There is likely to be a lengthy inquest into what went wrong at last week's informal EU summit in Salzburg where May was bluntly told key elements of the Chequers plan would not work.
The prime minister insists her proposal, which would see Britain maintain a "common rulebook" with the EU for trade in goods and agriculture, is the only credible option on the table which would avoid the return of a "hard border" between Northern Ireland and the Republic.
But she is facing increasingly vociferous calls from Tory Brexiteers to abandon Chequers in favour of a more basic free trade agreement in goods along the lines agreed between the EU and Canada.
This comes after UK Labour Party leader Jeremy Corbyn has said he will back a second Brexit referendum if it is supported by the Labour Party conference.
In the economic calendar on Monday is the Ifo survey in Germany at 0900 BST followed by the CBI industrial trends survey in the UK at 1100 BST. In the US is the Chicago Fed national activity index at 1330 BST.
The UK corporate calendar has full-year results from advisory and asset management firm River & Mercantile and a trading statement from water utility company Pennon Group.
Over the weekend, US cable Comcast emerged victorious in its battle to takeover pay-TV firm Sky, beating Twenty-First Century Fox with a GBP30 billion bid for the FTSE 100 constituent.
In a dramatic end to one of the City's most complex and convoluted takeover sagas in recent memory, Comcast won out in a day-long auction overseen by the UK Takeover Panel on Saturday.
Comcast's bid was GBP17.28 per share, beating 21st Century Fox's GBP15.67 per share, after the auction went to the maximum three rounds.
Shares in Sky closed at GBP15.85 per share on Friday - the stock already 57% higher in the year-to-date as the Comcast-Fox bidding war unfolded - around 9% lower than Comcast's bid.
The Japanese Nikkei 225 index and the Shanghai Composite in China are both closed on Monday, though the Hang Seng index in Hong Kong is open and is trading 1.3% lower.
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Sky