9th Aug 2018 07:05
LONDON (Alliance News) - Stock prices in London are seen opening higher on Thursday despite a fresh move by China in its US trade dispute, while the pound remains at lows not seen for almost a year.
IG futures indicate the FTSE 100 index is to open 23.7 points higher at 7,756.10. The FTSE 100 ended up 0.8%, or 58.17 points, at 7,776.65 on Wednesday.
"Yesterday China continued to play the tit-for-tat tariff game with the US, as Beijing announced plans to impose levies on USD16 billion worth of US imports, and they will take effect later this month," said CMC Markets UK's David Madden.
"The very action of the tariffs says more about China's rational than the size of the initiative. I suspect the Chinese government wants to let Trump know that they will not be pushed around, and at the same time they don't want to ratchet up tensions by unveiling a huge series of tariffs."
"Trump is not a man to back down easily and some sort of response can be expected," Madden added.
China will impose retaliatory tariffs on USD16 billion worth of US goods starting on August 23, the Commerce Ministry said on Wednesday.
The announcement came hours after the US announced it will impose 25% duties on the same amount of Chinese goods, starting on the same date.
China's 25% tariffs will apply to US products such as coal, gasoline, vehicles, motorcycles and medical equipment.
It is the second round of duties imposed by the countries as Washington and Beijing exchange tit-for-tat measures in an escalating trade war.
In China, the Shanghai Composite is up 1.9% in late trade on Thursday.
Consumer prices in China rose 2.1% on year in July, the National Bureau of Statistics said on Thursday. That exceeded expectations for 2.0% and was up from 1.9% in June. On a monthly basis, CPI added 0.3% after easing 0.1% in June.
The bureau also said producer prices jumped an annual 4.6% - beating forecasts for 4.5% and down from 4.7% in the previous month.
In other political news, the US announced fresh sanctions on Moscow on Wednesday, citing Russia's responsibility for an assassination attempt on a former double agent, Sergei Skripal and his daughter in an English city earlier this year with a nerve agent.
The sanctions, which will likely come into effect on August 22, would affect a range of security and defence goods. Certain exceptions would be made for commercial aviation and space flight materials.
The State Department said the US had determined Russia had used weapons banned under a chemical and biological weapons act, a law which mandates the imposition of sanctions. The law has been used twice before, on Syria and North Korea.
Britain has long blamed Russia for the attack, though Moscow denies involvement. The US had previously expelled Russian diplomats in a sign of solidarity with Britain.
The pound was quoted at USD1.2880 early Thursday compared to USD1.2888 at the London equities close Wednesday, as sterling slips below the USD1.29 mark for the first time since last September on fears of a no-deal Brexit.
In early UK company news, BHP Billiton said Wednesday it has reached an agreement to settle the class action complaint filed in the US District Court of the Southern District of New York on behalf of purchasers of American Depositary Receipts of BHP Billiton Ltd and BHP Billiton PLC between September 2014 and November 2015 in relation to the Samarco dam failure in November 2015.
As per the terms of the agreement, BHP has agreed to pay the plaintiffs USD50 million, with no admission of liability. The agreement is subject to approval by the District Court.
Travel and tourism firm TUI Group reported third-quarter group profit attributable to shareholders surged to EUR146.3 million from EUR47.7 million in the prior-year quarter.
Underlying earnings before interest, tax, and amortisation declined 13% to EUR193.4 million, while third-quarter revenue grew 5% to EUR5.02 billion.
Looking ahead, TUI said based on the positive third-quarter results and current trading, it expects for its full year to deliver at least 10% growth in underlying Ebita and around 3% growth in revenue, excluding cost inflation relating to currency movements.
The UK corporate calendar on Thursday has half-year results from gold miner Randgold Resources, outsourcer G4S, soft drinks bottler Coca-Cola HBC and insurer Legal & General. There are also third quarter results from travel operator TUI Group.
The euro stood at USD1.1606 early Thursday, down from USD1.1620 at the European equities close Wednesday.
Stocks in New York were mixed at the London equities close Wednesday. The DJIA was down 0.1%, the S&P 500 index up 0.1% and the Nasdaq Composite up 0.1%.
Twenty-First Century Fox on Wednesday reported a profit for the fourth quarter that trumped Wall Street expectations, as revenue grew 18%.
Fox's fourth-quarter profit surged 93% to USD920 million or USD0.49 per share from USD476 million or USD0.26 per share last year.
Revenue for the quarter grew 18% to USD7.94 billion from USD6.75 billion last year. Analysts had a consensus revenue estimate of USD7.56 billion for the quarter.
Coming up in US economic news on Thursday is July PPI at 1330 BST, with consensus expecting producer price inflation to remain flat at 3.4%, CMC Markets UK's Madden said.
The Japanese Nikkei 225 index is marginally lower early Thursday, while the Hang Seng index in Hong Kong is up 1.1%.
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