30th Sep 2015 06:35
LONDON (Alliance News) - Shares are seen having a positive open in London Wednesday, rebounding from the losses seen Tuesday, with investors focusing on a busy economic calendar from the UK, Europe and the US.
"European equity markets look set to post their worst quarter since 2011 and their second monthly decline in succession, despite seeing a rebound this morning, as concerns about a slowing global economy, uncertainty about the Chinese economy and the prospect of a US rate rise, causes investors to re-evaluate their strategy of choice of the last six years," says CMC Markets analyst Michael Hewson.
IG says futures indicate the FTSE 100 to open higher at 5,994.20 points. The index closed on Tuesday down 0.8% at 5,909.24, its second consecutive close below the 6,000-point mark, the first time this has happened since the tail-end of 2012.
Consumer confidence in the UK was down in September, the latest survey from GfK showed on Wednesday with an index score of +3. That was shy of expectations for +5 and down from +7 in August.
"Both the Chinese economic downturn and its negative impact on global markets and the ongoing migrant crisis, combined with other economic woes across the euro zone, has hit home," said Joe Staton, head of market dynamics at GfK.
UK house price inflation came in higher than expected in September, data from Nationwide Building Society showed Wednesday. House prices rose 3.8% year-on-year in September after a 3.2% increase seen in August. This was faster than the expected 3.7% increase.
On a monthly basis, house prices rose 0.5% in September, after seeing a 0.4% increase in August. Economists expected a 0.4% increase.
In the UK economic calendar, the third estimate of the UK Gross Domestic Product for the second quarter is expected at 0930 BST.
Germany's retail sales decreased unexpectedly in August after rising in the previous month, data from Destatis showed Wednesday.
Retail sales fell 0.4% month-on-month in August, confounding economists' expectations for a 0.2% increase. In July, sales had risen 1.6%. On an annual basis, retail sales grew at a slower pace of 2.5% in August, slower than the 3.8% gain in July. The expected rate of growth was 3.3%. It was the third successive monthly rise.
Still in the European economic calendar, eurozone unemployment and inflation data are due at 1000 BST.
Asia's major stock indices are higher Wednesday. The Japanese Nikkei 225 index closed up 2.7%. In China, the Hang Seng index in Hong Kong is up 1.8% and the Shanghai Composite is up 1.1%.
Industrial output in Japan fell a seasonally adjusted 0.5% on month in August, the Ministry of Economy, Trade and Industry said in a preliminary reading. That was well shy of forecasts for an increase of 1.0% following the 0.8% decline in July.
On a yearly basis, industrial production added just 0.2% - also below expectations for a gain of 1.8% following the flat reading in the previous month.
Wall Street ended mixed Tuesday. The Dow 30 closed up 0.3%, the S&P 500 ended up 0.1% and the Nasdaq Composite finished down 0.6%.
"With volatility in global markets continuing to provide a backdrop for the [US] Federal Reserve?s debate on monetary policy liftoff, today?s ADP employment data - in advance of the bellwether US labour market report on Friday - are expected to provide some reassurance that employment trends in September still remained solid," says Lloyds Bank.
US ADP employment figures, a measure of the change in the number of employed people in the US, are expected at 1315 BST. Economists forecast the data to come in at 195,000 in September, slightly higher than the 190,000 seen a month ago.
Also in a busy economic calendar for the US, New York Federal Reserve President William Dudley will be speaking at 1300 BST, just before the Chicago purchasing managers' index at 1445 BST and Energy Information Administration crude oil stocks at 1530 BST.
US Federal Reserve Chair Janet Yellen will be speaking at 2000 BST.
On the UK corporate front, J Sainsbury said its full-year underlying pretax profit will be "moderately ahead" of consensus after it achieved growth in sales in the second quarter of its financial year.
The supermarket chain said that total retail sales in the 16 weeks to September 26 grew 0.3% excluding fuel, but fell 1.8% including fuel. Like-for-like retail sales, however, declined for the seventh consecutive quarter, falling 1.1% excluding fuel and 3.3% including fuel.
This was an improvement on the first quarter, though, when like-for-like revenue excluding fuel decreased 2.1% and total sales excluding fuel declined 0.6%.
Retailer Darty has received a GBP533 million all-share takeover offer from Groupe Fnac, which the Darty board is considering.
UBS has raised HSBC Holdings to Buy from Neutral, while Goldman Sachs has resumed Roll-Royce at Buy. Meanwhile, HSBC has lifted Shire to Hold from Reduce.
By Daniel Ruiz; [email protected]
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