9th May 2018 06:59
LONDON (Alliance News) - Stocks in London are set to edge higher at the open on Wednesday as traders digest US President Donald Trump's decision to withdraw from the Iran nuclear deal.
"Despite a big build up to the announcement the markets have pretty much shrugged off the news, with Europe pointing to a rather lacklustre start," says Jasper Lawler, head of research at London Capital Group.
IG says futures indicate the FTSE 100 index of large-caps to open 5.75 points higher at 7,571.50 on Wednesday. The FTSE 100 index closed flat at 7,565.75 on Tuesday.
Trump said Tuesday the US will quit the "decaying and rotten" 2015 nuclear deal with Iran, breaking with Washington's closest allies.
Germany, France and Britain said in a joint statement that they will "remain parties" to the agreement, while Iranian President Hassan Rowhani said that Tehran also will work to uphold it.
Trump called the agreement "defective at its core" as he announced his decision to exit the deal and immediately reinstate economic sanctions against Iran.
The agreement - sealed by Trump's predecessor, president Barack Obama, with the support of China, Russia, Germany, France and Britain - eased sanctions on Tehran in exchange for commitments to halt what Western powers feared was a nuclear weapons programme.
"Oil markets experienced a roller coaster session in the lead up to the announcement amid rumours and second guessing as to what Trump's decision would be. After falling 3% on false reports that Trump was looking to remain in the deal, crude rallied hard across the rest of the session," LCG's Lawler says.
Brent oil was quoted at USD76.63 a barrel early Wednesday - having hit a high of USD76.73 overnight, its best price since late 2014 - up from USD74.15 at the London equities close on Tuesday.
In the US on Tuesday, Wall Street ended flat ahead of Trump's announcement, with the Dow Jones Industrial Average ending, S&P 500 and Nasdaq Composite all broadly unchanged.
In Asia on Wednesday, the Japanese Nikkei 225 index is down 0.5%. In China, the Shanghai Composite is down 0.1%, while the Hang Seng index in Hong Kong is up 0.5%.
Released early Wednesday, preliminary figures from the Cabinet Office showed Japan's leading index decreased by more than expected at the end of the first quarter. The leading index, which measures the future economic activity, dropped to 105.0 in March from 105.9 in February. The index was expected to fall to 105.1.
In the UK, the British Retail Consortium said like-for-like sales in the UK tumbled 4.2% on year in April, worse than the 0.8% decline forecast by economists. This follows a 1.4% rise in March.
Non-food items slide 4.9% in the three months to April and dropped 2.9% on year. Online sales advanced 6.7% on year, slowing from 10% growth in the previous month.
Still to come in the economic events calendar on Wednesday, Italy's retail sales are at 0900 BST and US producer prices at 1330 BST.
The corporate calendar on Wednesday has half-year results from tobacco company Imperial Brands and contract caterer Compass Group. There also are trading statements from outsourcer G4S, pub chain JD Wetherspoon, lender OneSavings Bank, baker Greggs and subprime lender Provident Financial.
Already out, travel operator TUI said turnover rose 7.2% to EUR6.81 billion for its half year to March 31, as its underlying earnings before interest, tax, depreciation and amortisation loss narrowed to EUR158.6 million from EUR214.3 million a year before.
Trading for summer 2018 continues to "fully meet" expectations, TUI said, with demand for Spain remaining strong. The company said there has been "particularly strong growth" in bookings recorded for Turkey, North Africa and Greece.
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