29th Jan 2021 06:59
(Alliance News) -Â Stocks in London are set to extend losses on Friday as the end of a mixed month draws to a close.
IG says futures indicate the FTSE 100 index of large-caps to open 74.65 points lower, or 1.1%, at 6,451.50 on Friday. The FTSE 100 closed down 41.22 points, or 0.6%, at 6,526.15 on Thursday.
"European markets look set to open lower as we look back and reflect on what has been a very choppy start to the first month of trading in 2021, as the initial euphoria at the start of January has given way to concerns about extended lockdowns and tighter restrictions for longer across Europe," said Michael Hewson, chief market analyst at CMC Markets.
"We'll also get our first look at how the French and German economies performed in Q4 as we get the first indications of GDP growth in a quarter characterised by a slow tightening of restrictions from very early on the quarter."
French gross domestic product, released earlier in the morning, showed the economy contracted 1.3% quarter-on-quarter in the final three months of 2020 after growth of 14% in the third quarter.
The economic events calendar on Friday still has German GDP at 0700 GMT. In the afternoon, there are US personal consumption expenditure numbers at 1330 GMT - the core reading is the US Federal Reserve's preferred gauge of inflation.
The dollar was a touch stronger on Friday.
Sterling was quoted at USD1.3711 early Friday, lower than USD1.3725 at the London equities close on Thursday. The euro traded at USD1.2105 early Friday, down from USD1.2125 late Thursday.
Against the yen, the dollar was quoted at JPY104.50, up from JPY104.30.
In the US on Thursday, Wall Street ended on a bright note overnight, with the Dow Jones Industrial Average up 1.0%, the S&P 500 up 1.0%, and the Nasdaq Composite up 0.5%.
"Wall Street rebounded overnight after US GDP and initial jobless claims sprung no surprises...Momentum has faded in Asia though, with the futures on all three indexes retreating, notably the Nasdaq futures, which have fallen 0.65%," commented Jeffery Halley, senior market analyst for Asia Pacific at Oanda.
In Asia on Friday, the Japanese Nikkei 225 index closed down 1.9%. In China, the Shanghai Composite is down 1.6%, while the Hang Seng index in Hong Kong is down 0.9%. The S&P/ASX 200 in Sydney closed down 0.6%.
Japan's industrial production shrank by 1.6% in December from the previous month amid the Covid-19 pandemic, while the nation's unemployment rate was unchanged at 2.9%, the government said. The reading in industrial production was almost in line with the median forecast of a 1.5% fall by analysts surveyed by the Nikkei Business Daily, and came after a 0.5% drop in November.
Gold was quoted at USD1,846.27 an ounce early Friday, lower than USD1,856.61 on Thursday. Spot silver was trading at USD26.39 an ounce, flat on USD26.44 late Thursday in London, having climbed from USD25.38 on Wednesday.
WallStreetBets investors were targeting the precious metals sector on Thursday. According to posts on Reddit, it is another heavily-shorted area. A WSB post circulating on Twitter called the silver bullion market "one of the most manipulated on earth", saying it should be at USD1,000 an ounce and "a squeeze would destroy banks".
London precious metals miners Fresnillo and Hochschild Mining closed up 6.7% and 8.5% in response on Thursday.
Brent oil eased to USD55.50 a barrel early Friday from USD55.80 late Thursday.
The UK corporate calendar on Friday has trading statements from Russian steelmaker Evraz and Paragon Banking Group. Gold miner Polymetal International posts annual production results.
By Lucy Heming;Â [email protected]
Copyright 2021 Alliance News Limited. All Rights Reserved.
Related Shares:
HochschildFresnillo