13th Aug 2015 06:37
LONDON (Alliance News) - London share prices are set to open higher Thursday, taking back some of the losses from the past couple of days, while China's central bank devalued the yuan for the third time in three days.
IG says futures indicate the FTSE 100 to open 46 points higher at 6,617.10. The index closed down 1.4% at 6,571.19.
The People's Bank of China unexpectedly adjusted its daily reference exchange rate by a further 1.1% on Thursday, setting it at 6.4010 to the US dollar. On Tuesday the bank had cut the rate by 1.9%, followed by a 1.6% drop on Wednesday.
There?s no basis for depreciation to persist and the Chinese central bank is capable of keeping the currency at an equilibrium level, the People?s Bank of China Assistant Governor Zhang Xiaohui said Thursday at a briefing in Beijing, Bloomberg reported.
The dollar currently trades at CNY6.4075, having touched a four-year high of CNY6.4374 earlier.
In Asia on Thursday, the Japanese Nikkei 225 closed up 1.1%. In China, stocks are mixed, with the Hang Seng in Hong Kong up 1.1% and the Shanghai Composite down 0.1%.
Wall Street ended flat to higher Wednesday. The DJIA closed flat, having touched lows it hasn't seen since late January. Meanwhile, the S&P 500, up 0.1%, and the Nasdaq Composite, up 0.2%, closed higher but touched one-month lows in early trade.
In Europe, the European Central Bank is expected to release the accounts of last month?s monetary policy meeting at 1230 BST.
"The report will offer in-depth insight into policy makers views on the economy and what those views are based on," says Oanda analyst Craig Erlam. "While the [European] central bank is not currently considering a change to its monetary policy, the minutes can offer insight into the pace and longevity of its quantitative easing program when taking into consideration current conditions."
The Oanda analyst says he expects the ECB to continue to buy bonds until at least September next year, despite some suggestions earlier this year that they may pull the plug early.
German inflation slowed as estimated to a 5-month low in July due to lower energy prices, final data from Destatis showed Thursday. Consumer price inflation fell to 0.2% from 0.3% in June. This was the lowest rate since February, when prices gained 0.1%. Month-on-month, consumer prices advanced 0.2%, reversing a 0.1% drop in June. Both annual and monthly figures matched flash data published on July 30.
On the UK corporate front, tourism and travel operator TUI posted higher revenue for the third quarter of its financial year and for the first nine months, despite its quarter being clouded by the terrorist attack in Tunisia. TUI said its earnings before interest, taxation and amortisation rose to EUR130 million from EUR92 million in the third quarter to the end of June and its loss for the first nine months of the year narrowed to EUR239 million from EUR242 million.
TUI said it is currently confident of delivering underlying earnings growth of 12.5% to 15.0% for its current financial year, with trading in the summer months so far proving solid.
FTSE 100-listed Glencore said it will book a large impairment related to its assets in Chad in light of the decline in oil prices and slashed its capital expenditure budget for the rest of 2015 as it reported a mixed set of production results in the first half of 2015.
The multi-commodity miner said that in light of the sharp decline in oil prices which caused it to amend its work programme in Chad, it will book a USD790 million impairment related to the assets, and restrict capital expenditure in the country. As a result, Glencore said the number of drilling rigs in operation in Chad also will "significantly" reduce.
According to traders, Goldman Sachs has downgraded G4S to Sell from Neutral, while Citigroup has cuts St. James's Place to Neutral from Buy.
Also Thursday, blue-chips as Fresnillo, Rio Tinto, Diageo, BG Group, BT Group, GlaxoSmithKline and Pearson, among many other London-listed companies, go ex-dividend, meaning new buyers no longer qualify for the latest dividend payout.
Still in the economic calendar Thursday, the French consumer price index is due at 0745 BST. In the US, retail sales and initial and continuing jobless claims are expected at 1330 BST. US Business inventories are expected at 1500 BST.
By Daniel Ruiz; [email protected]
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