27th Feb 2019 06:53
LONDON (Alliance News) - Stock prices in London are set to open lower on Wednesday following a soft session in the US overnight, while the pound continued to trade above the USD1.32 mark ahead of further parliamentary votes on the direction of Brexit this evening.
IG says futures indicate the FTSE 100 index of large-caps to open 18.92 points lower at 7,132.20 on Wednesday. The FTSE 100 index closed down 32.62 points, or 0.5%, at 7,151.12 on Tuesday.
"Whilst Asian markets inched higher overnight back towards 5 month highs, European bourses are set for a slow start after Wall Street's close lower. The 3 major US indices all closed in the red after a choppy session on Tuesday, as investors digested Jerome Powell's update," said London Capital Group's Jasper Lawler.
In the US on Tuesday, Wall Street ended slightly lower, with the Dow Jones Industrial Average, the S&P 500 and Nasdaq Composite all declining 0.1%.
US Federal Reserve Chairman Jerome Powell saw "conflicting signals" in his otherwise positive assessment of the US economy on Tuesday, noting market volatility at the end of 2018 and a decline in financial conditions that support growth.
Powell said ongoing trade disputes were among issues the US central bank will closely monitor, along with slowing growth in China and Europe and Brexit negotiations.
"While we view current economic conditions as healthy and the economic outlook as favourable, over the past few months we have seen some crosscurrents and conflicting signals," Powell said in testimony prepared for delivery to the Senate banking committee.
In Asia on Wednesday, the Japanese Nikkei 225 index closed up 0.5%. In China, the Shanghai Composite is flat, while the Hang Seng index in Hong Kong is 0.1% higher.
Meanwhile. sterling was quoted at USD1.3235 early Wednesday, softer than USD1.3263 at the London equities close on Tuesday but still around its best levels since late January.
"The pound has kept hold of most of its gains from the previous session. Brexit will remain very much in focus for pound traders across the next two weeks as it moves to crunch point," said Lawler.
UK Prime Minister Theresa May has issued a plea to MPs to back a Brexit deal, telling Parliament to "do its duty" ahead of another series of votes on the government's negotiating strategy.
MPs will vote on the prime minister's negotiating strategy for Brexit and a series of amendments on Wednesday evening, ahead of another "meaningful vote" on Theresa May's Withdrawal Agreement next month.
On Tuesday, May promised to give MPs a vote on extending Brexit negotiations or withdrawing from the EU without a deal if her plan is rejected next month.
In the economic calendar on Wednesday, eurozone consumer confidence is at 1000 GMT and the US goods trade balance and durable goods orders both at 1330 GMT. Later are US pending home sales and factory orders, both at 1500 GMT.
Also on Wednesday will be the results of the quarterly FTSE index review after the market closes, with John Wood Group and GVC Holdings seen slipping out of the FTSE 100 to be replaced by Phoenix Group Holdings and Just Eat.
Stockbroker AJ Bell is set to join the FTSE 250 after floating in London last year, while retailers Superdry and Halfords face relegation.
First though, in Wednesday's corporate calendar, are earnings from broadcaster ITV, housebuilder Taylor Wimpey, wealth management firm St James's Place, and engineer Weir.
Already out, Rio Tinto reported a rise in annual profit and declared a special dividend.
Pretax profit for 2018 came in at USD18.17 billion, up sharply from USD12.82 billion last year, as revenue rose marginally to USD40.52 billion from USD40.03 billion.
The miner declared a final dividend of 135.96 pence per share, up from 129.43p in 2017, bringing the total for the year to 232.78p from 212.56p last year. In addition, Rio Tinto proposed a special payout of 183.55p.
"We have once again announced record cash returns to shareholders of USD13.5 billion on the back of USD18 billion of underlying Ebitda and a Return on Capital Employed of 19%. These strong results reflect the efforts of the team to implement our value-over-volume strategy as we continued to strengthen the portfolio and invest in future growth," said Chief Executive Jean-Sebastien Jacques.
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