8th Jun 2020 06:58
(Alliance News) - Stock prices in London are pointed lower at the open on Monday despite investors remaining hopeful of a strong global economic recovery after the surprisingly positive US jobs report on Friday.
IG futures indicate the FTSE 100 index is to open 31.80 points lower at 6,452.50. The blue-chip index closed up 142.86 points, or 2.3%, at 6,484.30 on Friday.
London Capital Group's Jasper Lawler said: "It will be a challenge to maintain the sheer optimism on display from Friday. The blowout jobs report has got economists talking about V-shaped recoveries. All the while the market has been doing its own V.
"European shares look headed for a softer start. AstraZeneca will be one to watch on the FTSE over plans to buy Remdesivir-maker Gilead Sciences."
Industry sources played down suggestions that Covid vaccine maker AstraZeneca could make a swoop for US rival Gilead Sciences, the Daily Telegraph reported on Sunday.
Over the weekend, Bloomberg reported that AstraZeneca had approached Gilead about a near-GBP200 billion blockbuster merger that would be the biggest pharmaceutical merger on record.
However, according to the Telegraph, a tie-up is unlikely, citing sources arguing that AstraZeneca would not be chasing down a merger at a time when it is racing to create a vaccine against Covid-19.
In the US on Friday, Wall Street ended sharply higher, with the Dow Jones Industrial Average up 3.2%, S&P 500 up 2.6% and Nasdaq Composite up 2.1%, after a strong US jobs report for May.
On Friday, the Labor Department reported the US economy regained 2.5 million jobs in May and the unemployment rate dropped as pandemic shutdowns began to ease.
The Japanese Nikkei 225 index is up 1.2% on Monday. In China, the Shanghai Composite is up 0.7%, while the Hang Seng index in Hong Kong is down 0.2%.
Japan's economy contracted at an annualised rate of 2.2% in the first quarter, revised from a preliminary reading of a 3.4% contraction, with business investment better than initially estimated, the government said on Monday.
The revised gross domestic product reading in the January-to-March period was almost in line with the 2.0% decline predicted by analysts surveyed by the Nikkei business daily and followed a 7.2% contraction in the last quarter of 2019.
The pound was quoted at USD1.2700 early Monday, marginally lower from USD1.2714 at the London equities close Friday.
Travellers arriving in the UK will be required from Monday to self-isolate for 14 days under government measures to guard against a second wave of coronavirus.
People who fail to comply could be fined GBP1,000 in England, and police will be allowed to use "reasonable force" to make sure they follow the rules.
British Airways, part of International Consolidated Airlines Group, has begun legal proceedings over what it calls the UK government's "unlawful" quarantine measures.
The euro was quoted USD1.1284, down from USD1.1307 late Friday.
Against the yen, the dollar was quoted at JPY109.44, soft from JPY109.75.
Brent oil was quoted at USD43.06 a barrel Monday morning, up from USD42.16 late Friday.
OPEC members, led by Saudi Arabia, and other key oil producers agreed on Saturday to extend historic output cuts through July, as oil prices tentatively recover and coronavirus lockdowns ease.
The 13-member cartel and its allies, notably Russia, decided to extend by a month deep May and June cuts agreed in April to boost prices, the Organization of the Petroleum Exporting Countries said in a statement. But Mexico, which had already made clear ahead of the talks that it "could not adjust...production further", announced that it would not be complying.
Gold was quoted at USD1,688.80 an ounce, up from USD1,677.02 late Friday.
Ahead in the economic calendar this week, the US Federal Reserve will announce its latest interest rate decision on Wednesday.
By Arvind Bhunjun; [email protected]
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