9th Sep 2015 06:38
LONDON (Alliance News) - London stocks are set to open higher Wednesday, with UK industrial and manufacturing production data expected at 0930 BST in focus, as Chinese stocks rally on expectations of further stimulus measures by the country's authorities.
In Hong Kong, the Hang Seng index is up 2.9%, while the Shanghai Composite is up 1.4%.
"Yesterday?s rebound has continued in Asia this morning with strong gains there as investors speculate that Chinese authorities will continue to ramp up their recent stimulus measures with further action in the coming days," says CMC Markets Chief market analyst Michael Hewson.
"According to a [China's] Ministry of Finance statement late Tuesday investment in major construction projects will be brought forward with the help of private financing. Some income tax changes to dividends were also announced to encourage long term investment in Chinese shares," writes Hewson.
The economic forum known as the Summer Davos kicked off Wednesday in the northeast Chinese city of Dalian. Over 1,700 business leaders, political figures and entrepreneurs from 90 countries gathered to discuss new growth strategies at the World Economic Forum's Annual Meeting of the New Champions. Co-hosted by China and running from September 9 to 11, the event comes amid mounting fears of a sharp downturn in the world's second-largest economy.
Meanwhile, in Japan, the Nikkei 225 closed up 7.7%, wiping out the losses seen on Tuesday.
Japan's consumer confidence improved by more than expected in August after falling in the previous month, survey data from the Cabinet Office showed Wednesday. The consumer confidence index rose by 1.4 points to 41.7 in August from 40.3 in July. Economists had expected the index to increase slightly to 40.5.
IG says futures indicate the FTSE 100 to open higher at 6,240.80. The index closed up 1.2% at 6,146.10 on Tuesday pushed higher by insurers and miners.
Ahead of Thursday?s Bank of England Monetary Policy Committee announcement and the publication of the last meeting's minutes, Lloyds Bank said it looks for a relatively soft report for official July UK manufacturing and industrial production data.
"After the 0.2% month-on-month rise in manufacturing output in June, we expect renewed sluggishness in July, reflecting in part sterling?s strength in recent months, and have pencilled in a flat outturn," said Lloyds. "Month-on-month growth for overall industrial production in July could be slightly negative, weighed down also by weak oil and gas output."
The bank also said that these forecasts suggest that the BoE's monetary policy will remain firmly on hold for now.
Wall Street ended higher Tuesday, re-opening after a holiday on Monday, with the DJIA up 2.4%, the S&P 500 up 2.5% and the Nasdaq Composite up 2.7%.
The focus in the US will be in the release of the JOLTS job openings data, expected at 1500 BST, as market participants search for clues as to whether the US Federal Reserve will raise US interest rates this month or later this year. Before that, the Redbook index is due at 1355 BST.
On the UK corporate front, housebuilder Barratt Developments said its pretax profit, revenue and house sales were all higher in the year to the end of June, prompting the company to return substantially more money to shareholders, including a special dividend.
The company said it will pay a 10.0 pence per share special dividend. In addition to a total ordinary dividend payout of 15.1p, up from 10.3p a year earlier, the total payout to shareholders will be 25.1 pence per share, more than double the 10.3 pence it paid the year before and meaning its total capital return for the year is GBP250.0 million, up from GBP102.0 million.
In addition to the strong results, Barratt said trading in its current financial year has continued the positive momentum, with net private reservations per week up 15% year-on-year, and the group's forward sales book at September 6 was 32% higher than a year before.
Sports Direct International said that trading so far in its new financial year has continued to be in line with management expectations.
In a trading update ahead of its annual general meeting being held Wednesday, the FTSE 100 sporting goods retailer said that there has been no material change in the financial position of the group since the end of its last financial year and that trading from April 27 to September 8 was in line.
The Financial Times had reported Tuesday that Royal London Asset Management is set to vote against the re-election of Sports Direct founder Mike Ashley as executive deputy chairman at the AGM. Ashley Hamilton Claxton, corporate governance manager at Royal London, one of the City's most prominent institutional investors, said the investment manager is "very concerned about the long list of corporate governance failings that have not been addressed."
Meanwhile, SABMiller said that Gavin Hattersley has been appointed as chief executive of MillerCoors, the US joint venture between SABMiller and Molson Coors Brewing Co. Hattersley, who has been serving as interim CEO since July 1 and was also chief financial officer of Molson Coors, is replacing Tom Long who retired in June.
Goldman Sachs has cut Taylor Wimpey to Neutral from Buy, while also downgrading Redrow to Neutral from Buy. The investment bank has upgraded Foxtons Group to Neutral from Sell, while it has added Crest Nicholson Holdings to its Conviction Buy List from Neutral.
By Daniel Ruiz; [email protected]
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