26th Jun 2023 07:00
(Alliance News) - Stocks in London are set to open marginally lower on Monday, as markets looked to a new week, seemingly unfazed by a failed revolt by a mercenary army in Russia over the weekend.
IG says futures indicate the FTSE 100 to open 1.83 points higher on Monday. The FTSE 100 index closed down 40.16 points, or 0.5%, at 7,461.87 on Friday, ending the week 2.4% lower.
Wagner mercenaries headed back to their base on Sunday after Russian President Vladimir Putin agreed to allow their leader to avoid treason charges and accept exile in neighbouring Belarus.
The agreement halted an extraordinary crisis – a private army led by Putin's former close ally Yevgeny Prigozhin trying to storm Moscow – but analysts said Wagner's revolt had exposed Putin's rule as more fragile than previously thought.
"The Wagner incident will likely remain broadly ignored by investors, unless there are fresh developments that could change the course of the war in Ukraine. Until then, markets will be back to business as usual," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
In the US on Friday, Wall Street ended lower. The Dow Jones Industrial Average closed down 0.7%, the S&P 500 down 0.8% and the Nasdaq Composite down 1.0%.
"European and US stock markets have seen a significant shift in sentiment over the past few days when it comes to the global economy. Rising bond yields, driven by more hawkish central banks, which has prompted investors to reassess the outlook when it comes to valuations and growth," said Michael Hewson, chief market analyst at CMC Markets.
Sterling recovered slightly on Monday morning after seeing no lasting gain last week from a hawkish Bank of England.
The pound was quoted at USD1.2735 early Monday, up from USD1.2709 at the London equities close on Friday.
The UK central bank had surprised markets with a chunkier-than-expected 50 basis point interest rate hike. It took the bank rate to 5.00% from 4.50%.
The euro traded at USD1.0908 early Monday, higher than USD1.0888 late Friday. Against the yen, the dollar was quoted at JPY143.40, lower versus JPY143.73 on Friday.
A senior Federal Reserve official has criticized proposals to increase bank capital requirements and called for an "independent and impartial" investigation into the rapid failure of US banks earlier this year.
Fed Governor Michelle Bowman said Sunday that a recent report into banking failures put together by the US central bank's vice chair for supervision, Michael Barr, was "not reviewed by the other members of the Board prior to its publication".
"Troublingly, other board members were afforded no ability to contribute to the report's content," she told a conference in the Austrian city of Salzburg in prepared remarks.
Barr's report called for greater banking oversight while admitting to the Fed's own failures in its oversight of the failed California lender Silicon Valley Bank.
In Tokyo on Monday, the Nikkei 225 index was down 0.2%. In China, the Shanghai Composite was down 1.1%, while the Hang Seng index in Hong Kong was down 0.2%.
The S&P/ASX 200 in Sydney closed down 0.2%.
Brent oil was trading at USD74.06 a barrel early Monday, up from USD73.71 late Friday. Gold was quoted at USD1,925.15 an ounce, higher than USD1,922.24 on Friday.
In UK corporate news, Sky News reported on Sunday that shipbroker Braemar is likely to tell investors within the coming days that it will be unable to meet the publication deadline for its full-year results.
Sky said that City sources said that BDO, the company's auditor, had notified the company of concerns in its accounts.
In Monday's corporate calendar, there are half-year results from Rio Tinto and Carnival, as well as a trading statement from Associated British Foods.
The economic calendar has the German Ifo business climate index at 0900 BST.
By Heather Rydings, Alliance News senior economics reporter
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