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LONDON MARKET EARLY CALL: Stocks to edge lower; dollar weakens further

21st Nov 2023 06:58

(Alliance News) - Stocks in London are set to open slightly lower on Tuesday, as the pound crosses above the USD1.25 mark amid dollar weakness and hawkish comments from the UK's central bank.

IG says futures indicate the FTSE 100 to open down 2.0 points at 7,494.3 on Tuesday. The index of London large-caps closed down 7.89 points, 0.1%, at 7,496.3 on Monday.

Sterling was quoted at USD1.2525 early Tuesday, higher than USD1.2497 at the London equities close on Monday. It is the highest level seen since early September.

The governor of the Bank of England on Monday warned it is "much too early" to say that inflation has been beaten, despite figures last week which showed the prime minister's target to halve inflation had been reached. Andrew Bailey, who sits on the body which decides interest rates, said that inflation is still "too high".

In a speech, Bailey said that it was both too soon to say that inflation had been beaten and too early to start talking about cutting interest rates.

The dollar was weaker against other major currencies as well, as investors awaited the latest minutes from the US Federal Reserve's meeting earlier this month. The release will be a day earlier than usual, due to the Thanksgiving holiday on Thursday shortening the trading week in the US. Financial markets in New York reopen on Friday but will close early that day.

"The bulls are in charge as evidence of easing US inflation supported bets that the Fed was done raising interest rates, and the next move is down," explained SPI Asset Management's Stephen Innes.

The euro traded at USD1.0956, higher than USD1.0942. Against the yen, the dollar was quoted at JPY147.71, down versus JPY148.32.

Gold was quoted at USD1,991.23 an ounce early Tuesday, higher than USD1,974.08 on Monday.

Brent oil was trading at USD81.75 a barrel, lower than USD82.78.

In the US on Monday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.6%, the S&P 500 up 0.7% and the Nasdaq Composite up 1.1%.

Microsoft hit an all-time intra-day high, before closing up 2.1%. The firm announced it hired OpenAI co-founder Sam Altman following his shock sacking from the company whose ChatGPT chatbot has led the rapid rise of artificial intelligence technology.

After the New York market close on Tuesday, Nvidia will report its third-quarter results. The chipmaker has been the prime beneficiary of the excitement surrounding the AI sector, with its stock more than tripling in value since the beginning of the year.

In Asia on Tuesday, the Nikkei 225 index in Tokyo closed down 0.1%. In China, the Shanghai Composite was flat, while the Hang Seng index in Hong Kong was marginally higher. The S&P/ASX 200 in Sydney closed up 0.3%.

Tuesday's London corporate calendar has half-year results from electronics seller AO World and flexible workspace provider Workspace.

By Elizabeth Winter, Alliance News deputy news editor

Comments and questions to [email protected]

Copyright 2023 Alliance News Ltd. All Rights Reserved.

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