20th Sep 2018 06:56
LONDON (Alliance News) - Stocks in London are set to open higher on Thursday, ahead of UK retail sales data at 0930 BST, as it trailed yesterday's gains from softer than expected tariffs implemented in the US-China trade spat.
IG says futures indicate the FTSE 100 index of large-caps to open 6.58 points higher at 7.337.70 on Thursday. The FTSE 100 index closed up 0.4% at 7,331.12 on Wednesday.
Sterling was quoted at USD1.3148 early Thursday ahead of the sales data reading, lower than USD1.3162 at the London equities close on Wednesday.
"The pound could receive a boost as investors turn their attention to UK retail sales data. Sales are expected to dip in August to 2.3% after a stellar July, which saw sales bound higher to 3.7% following a decline in June. As a lead indicator, CBI data showed that sales were strong in August and the hot weather was also supportive of a good spending month; however, given the huge jump in July, we expect only a moderate increase in today’s reading. A surprise to the upside could lift the pound, although, ultimately the mood and tone from the Salzburg summit will drive the price of the pound," said Jasper Lawler, head of Research at London Capital Group.
EU leaders are to turn their attention to Brexit on the second day of an informal meeting in the Austrian city of Salzburg, after British Prime Minister Theresa May briefed them on her view of negotiations.
Over dinner on Wednesday, May told her EU colleagues that the onus was now on Brussels to find common ground as the clock ticks down to reach a deal on Britain's departure from the bloc on March 29, 2019.
May has been touting her "Chequers Plan," which she called on Wednesday "the only credible and negotiable plan on the table."
In early UK company news, blue chip miner Rio Tinto said it intends to return its coal disposal proceeds to shareholders through a USD3.2 billion share buyback programme.
The programme will combine an off-market buyback tender targeting up to 41.2 million shares, of around USD1.9 billion, and on-market purchases.
Details of the on-market purchases will be set out following the completion of the off-market buyback, which is expected on November 12.
The disposal proceeds come from the completed sales of Hail Creek, Valeria and Kestrel, all located in Australia.
The UK corporate calendar has first quarter results from IG Group and half year results from fashion brand French Connection, construction firm Kier Group and oil and gas company SOCO International.
The economic events calendar on Thursday sees Eurozone consumer confidence at 1500 BST and US initial jobless claims at 1330 BST.
In the US on Wednesday, Wall Street ended broadly higher, with the Dow Jones Industrial Average ending up 0.6%, the S&P 500 up 0.1% and Nasdaq Composite closing 0.1% lower.
US President Donald Trump on Monday announced 10% tariffs on an additional USD200 billion worth of Chinese imports into the US.
In his biggest strike yet in an escalating trade war, the president has now imposed tariffs on an estimated half of goods imported by the US from China.
The new tariffs will take effect on September 24 and will initially be set at 10%, increasing to 25% on January 1, Trump said.
"Trade tensions have stepped up, but you wouldn’t know it to look at European and US equity markets. The USD200 billion worth of tariffs from Trump, and Beijing’s reaction weren’t exactly a surprise. Investors are cautiously optimistic as that round of tariffs weren’t too severe. Equities in Asia overnight were mixed as the mood isn’t particularly strong one way or another. The Trump administration and Beijing have hardened their positions, but as long as trading relations don’t take another sour turn, investors could remain upbeat," said David Madden, analyst at CMC Markets.
In Asia on Thursday, the Japanese Nikkei 225 index is up 0.1%. In China, the Shanghai Composite is down 0.1%, while the Hang Seng index in Hong Kong is down 0.1%.
In Japan, Prime Minister Shinzo Abe has won a leadership race in his ruling Liberal Democratic Party.
Abe, who was running for a third three-year term as LDP leader, easily defeated former defence minister Shigeru Ishiba in the two-man race thanks to support from a majority of his party's lawmakers, results showed.
The victory in the ruling party's presidential election is tantamount to winning the prime ministership.
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