15th Sep 2015 06:33
LONDON (Alliance News) - London share prices are called for a positive open Tuesday, with a busy economic calendar ahead including UK consumer price and producer price indices due at 0930 BST.
IG says futures indicate the FTSE 100 to open higher at 6,090.30 points. The blue-chip index closed down 0.5% at 6,084.59 on Monday.
Oanda analyst Craig Erlam says the economic data being released Tuesday could bring some volatility to the markets, especially UK inflation data, given the Bank of England?s "apparent" desire to raise interest rates in the foreseeable future.
"Inflationary pressures are lacking in the UK, as they are throughout the world at the moment, and yet policy makers at the BoE are determined to begin the cycle of raising rates," says Erlam. "The worry is that inflation could rise rapidly if they keep rates low for too long, despite the CPI reading currently only being at 0.1% and expected to fall to 0% in August."
Also in the economic calendar Tuesday, German ZEW surveys of economic sentiment are due at 1000 BST while the Eurozone trade balance also is due at 1000 BST.
In the US, retail sales data are expected at 1330 BST, while the NY Empire State manufacturing index also is due at 1330 BST. US Industrial production is due at 1415 BST, and US business inventories are expected at 1500 BST.
Lloyds Bank said that, in advance of Thursday?s US Federal Reserve monetary policy decision, Tuesday's set of US data seems "unlikely to meaningfully change" the view of most Federal Open Market Committee members.
Analysts are still unable to settle on a common view as to whether the Fed will raise US interest rates this week or later in the year. Nomura expects the US central bank to hold fire and wait for a December "lift-off", while Societe Generale analyst Kit Juckes expects the Fed to raise rates on Thursday.
SocGen's Juckes believes that the US economy is strong enough to withstand the start of policy normalisation and the risks of waiting outweigh the risk of a negative shock if the FOMC members do act.
Wall Street ended lower Monday. The DJIA closed and the S&P 500 finished down 0.4% and the Nasdaq Composite closed down 0.3%.
In Asia on Tuesday, the Japanese Nikkei 225 closed up 0.3%.
The Bank of Japan kept its massive stimulus unchanged on Tuesday as expected by economists. In a statement, the BoJ announced that the policy board headed by Governor Haruhiko Kuroda decided by an 8-1 majority vote to maintain its target of raising the monetary base at an annual pace of about JPY80 trillion.
The Japanese central bank will conduct purchases in a flexible manner in accordance with financial market conditions. The BoJ also revealed that private consumption has been resilient and housing investment has been picking up against the background of steady improvement in the employment and income situation.
Meanwhile, weakness is back in Chinese equities. The Hang Seng index in Hong Kong is down 0.5% and the Shanghai Composite is off 3.6%.
On the UK corporate front, Kingfisher reported a drop in profit in the first half of its financial year, which it said was hit by movements in currency exchange rates, but said that the business is on track in its turnaround programme. The DIY retailer, which owns brands including B&Q and Screwfix, reported a 1.8% decline in pretax profit in the 26 weeks ended August 1 to GBP386 million from GBP393 million in the same period the year before, as sales fell 4.8% to GBP5.49 billion from GBP5.77 billion.
Kingfisher said that sales and profit were hit by adverse foreign exchange movements on the translation of non-sterling profits, but that it is progressing with its plan to turn the business around. The company will pay an interim dividend of 3.18 pence, up 1% on the 3.15p it paid the prior year.
British Land said it and partner Oxford Properties have signed a deal to let two further floors at the Leadenhall Building, known as The Cheesegrater, in the City of London. The property group said liquefied petroleum gas trader Petredec and insurance and reinsurance company Fidelis Insurance have agreed to take the floors.
Petredec has signed a ten-year lease to occupy 9,970 square feet on Level 35 of the building, while Fidelis has signed a ten-year deal to occupy 10,345 square feet on Level 34.
Anglo-South African life insurer and investment manager Old Mutual said Chief Operating Officer Paul Hanratty is to leave the company. The group said Hanratty will leave the company in March 2016, but will then remain available to the company for a further 12 months.
London Stock Exchange Group confirmed it has sold its market data vendor and retail trading provider Proquote To Australia-listed financial technology company IRESS for an undisclosed amount. The exchange operator said it had identified Proquote as a non-core operation going forward for its information services arm.
The acquisition includes the Proquote connectivity hub business and LSEHub, a FIX order routing business. LSE expects the deal to complete in the fourth quarter of 2015.
Ocado Group reported growth in sales in the third quarter of its financial year as its average orders per week increased, and it said that it expects to continue growing slightly ahead of the UK online grocery market.
The purely online grocery business said that its group sales in the 12 weeks ended August 9 grew 17% to GBP272.0 million from GBP231.9 million in the same period the year before, as retail sales rose 15% to GBP252.0 million from GBP218.5 million.
Barclays has cut banking and asset management company Close Brothers Group to Equal Weight from Overweight.
By Daniel Ruiz; [email protected]
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