29th Jan 2025 06:56
(Alliance News) - Stocks in London are set to open flat on Wednesday, ahead of a Federal Reserve decision and major tech earnings across the Atlantic.
US stocks climbed on Tuesday, with tech clawing back some losses after sinking on Monday amid the DeepSeek-driven sell-off.
IG says futures indicate the FTSE 100 to open just 3.4 points higher at 8,537.27 on Wednesday. The index of London large-caps ended up 30.16 points, 0.4%, at 8,533.87 on Tuesday.
The CAC 40 in Paris is called down 0.1% but the DAX 40 in Frankfurt up 0.4%.
The pound was quoted at USD1.2459 on Wednesday morning, up from USD1.2432 at the time of the London equities close on Tuesday. The euro advanced to USD1.0443 from USD1.0424. Versus the yen, the dollar faded to JPY155.28 from JPY155.63.
A barrel of Brent fell to USD76.37 from USD77.21. An ounce of gold fetched USD2,760.65, up from USD2,755.79.
There are interest rates decisions in Canada and the US at 1445 and 1900 GMT respectively on Wednesday.
Swissquote analyst Ipek Ozkardeskaya commented: "The US job market remains healthy, US growth robust, earnings encouraging, consumer spending strong and inflation is giving signs of heating up. US headline inflation hit the 2.9% in the latest reading, up from 2.4% printed earlier in fall, while core inflation has slightly come down but proves to be very sticky above the 3% mark. But, the latest consumer survey showed that Americans are losing confidence in the economy, they say that the jobs are harder to get, that the income is expected to improve less and that business conditions don't look as encouraging as they did a few months ago.
"What Powell will say matters more than what the Fed announces today. Before the Fed announcement, investors bet that the Fed won't announce the next rate cut before May. A dovish tone from the Fed should further ease the US yields, while a cautious tone could revive the bond sell off. The US dollar could give back a part of Trump-led gains with a supportive Fed statement, but the fundamentals compared to the other major economies will likely remain supportive of the US dollar. And the Trump tariff risks remain tilted to the upside."
In Tokyo, the Nikkei 225 was up 1.0%, while the S&P/ASX 200 in Sydney rose 0.6%. Financial markets in Shanghai and Hong Kong are closed.
In New York on Tuesday, the Dow Jones Industrial Average rose 0.3%, the S&P 500 climbed 0.9% and the Nasdaq Composite surged 2.0%.
Nvidia clawed back some of its 17% slump from the start of the week to add 8.9% on Tuesday.
Away from the Fed, major US tech stocks will take centre stage. Meta Platforms, Microsoft and Tesla report annual earnings on Wednesday. Apple earnings follow on Thursday.
Swissquote's Ozkardeskaya commented: "Speaking of earnings, ASML—another victim of the DeepSeek-triggered tech rally this week—couldn't rebound as successfully as its US peers on Tuesday. But the company just printed a set of better-than-expected Q4 results before the bell in Europe, which should help shrug off some of the DeepSeek dust."
The equipment supplier to semiconductor firms said total net sales in the final quarter of 2024 rose to EUR9.26 billion from EUR7.24 billion a year prior. Net income increased to EUR2.69 billion from EUR2.05 billion.
Wednesday's local corporate calendar sees a trading update from trading platform AJ Bell.
By Eric Cunha, Alliance News news editor
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