10th Jun 2014 06:38
LONDON (Alliance News) - UK stocks are set to open lower Tuesday, despite a positive session in the US Monday and in Asia overnight, as markets across Europe lack a catalyst to push them through recent highs.
Monday saw another record close for US stocks, with the S&P 500 and the DJIA both recording fresh highs in nearly every session for the past two weeks. Monday's gains were small, with both indices closing up 0.1%, but that led into a mostly positive Asian session, where the Shanghai Composite gained 0.9%, the Hang Seng is up 0.8%, but the Nikkei lost 0.8%.
The momentum looks likely to stall in London Tuesday, with spread betters indicating that the FTSE 100, after having closed Monday at 6,875, will open between 12 and 17 points, or about 0.2% lower.
Chinese inflation data released overnight showed consumer prices rising at 2.5% year-on-year in May, an acceleration from the 1.8% price growth recorded in April, and just slightly faster than the 2.4% that had been expected, although still well below the 3.5% government target.
"Today?s number represents a somewhat ?sweet spot? for China," said Alpari market analyst Joshua Mahony, "allaying fears of a disinflationary environment but also remaining low enough to allow for future stimulus measures."
The data comes after Monday's latest stimulus effort from the Peoples Bank of China. The central bank lowered its Reserve Requirement Ratio, or the amount of cash that lenders need to set aside with the central bank, by half a percentage point, in an effort to loosen the supply of consumer credit.
The British Retail Consortium sales monitor, also released overnight, showed the value of sales increased by 0.5% year-on-year in May. That was well shy of forecasts for an increase of 1.6%, following the 4.2% gain in April.
The main economic focus of the morning after the London market open will be UK industrial and manufacturing production numbers for the month of April, due at 0930 BST. Economist expect industrial production to have risen by 0.3% month-on-month, after it contracted by 0.1% in March. Manufacturing production growth is expected to have slowed slightly to 0.4% month-on-month, from the 0.5% growth recorded in March.
"Given that this data is the first official second-quarter data from the Office for National Statistics with respect to this sector, it could knock some shine off the recent good economic readings we?ve seen in the recent Purchasing Managers Index data, says CMC Markets market analyst Michael Hewson.
Later in the day, at 1500 BST, the National Institute of Economic and Social Research will release its estimate of UK GDP growth over the three months to May.
There's a lack of anything top tier from the US all week, with Tuesday's main interest being the NFIB business optimism index from May at 1230 BST, and wholesale inventories data for April at 1300 BST. Inventories are expected to have risen by 0.6% over the month, less that the 1.1% recorded in March.
From the UK corporate calendar Tuesday, FTSE 250 listed Oxford Instruments has released its full-year results showing a 2.7% year-on-year revenue increase. Full-year numbers are also out from small-caps Phoenix IT Group, Sepura, and Carclo, while Spirit Pub Company has released a quarterly trading update, and Ted Baker has released an interim management statement.
By Jon Darby; [email protected]; @jondarby100
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
CarcloOxford InstrumentsTED.LSEPU.L