17th Oct 2014 06:37
LONDON (Alliance News) - UK stocks are set to open lower on Friday after experiencing a volatile session on Thursday. With little in the economic calendar, investors are looking ahead to a speech by US Federal Reserve Chair Janet Yellen.
Futures indicate the FTSE 100 to open 10 points lower at 6186.3. The index closed at 6,195.91 on Thursday.
Europe encountered a roller-coaster day on Thursday as volatility gripped the market. Concerns about global growth and the spread of the Ebola virus has seen many investors pull out of equities and into the safe government bonds of the UK, US and Germany.
"For the past two weeks with the global growth outlook darkening, concerns about Europe, Greece and Ebola weighing on sentiment, the prospects for global stock markets were starting to become more and more uncertain, and while the bears have had the upper hand so far the past few weeks, there has been some tentative signs of some brave investors looking to get back into the market," says CMC Markets' chief market analyst Michael Hewson.
US and European stocks were given a boost in late trade Thursday from comments made by St Louis Federal Reserve Bank President James Bullard. In an interview with Bloomberg News, Bullard suggested that the Fed should consider delaying the end of its asset purchase program to halt the decline in inflation expectations. The Fed has previously indicated that it plans to bring the quantitative easing program to a close at its next monetary policy meeting later this month.
Fed Chair Yellen will make a speech at the Boston Economic Conference at 1330 BST and investors will be hoping for more direction for monetary policy.
"The challenge for policy makers is to provide support to help reduce panic at a time when economic fundamentals appear to hold limited sway. The focus today is therefore very much on Fed Chair Yellen?s speech in Boston [Friday] afternoon," says Jeavon Lolay, head of international macroeconomics at Lloyds bank.
US stock markets, like Europe, encountered a particularly volatile day to close Thursday fairly mixed. The DJIA closed down 0.2%, the S&P 500 flat and the Nasdaq Composite up 0.1%.
Asian equities are trading broadly lower Friday, with the Japanese Nikkei closing down 1.4%, while the Hang Seng trades up 0.4% and the Shanghai Composite trades down 0.7%.
Engineering and aerospace group Rolls Royce updated its guidance for the full year and next year, while providing medium-term guidance, as it said it now expects underlying revenue this year to be lower and said its outlook for 2015 has become more challenging. The company said its expects underlying revenue for the full year to be 3.5% to 4% lower, compared to previous guidance of flat revenue against the comparable year. This includes adverse foreign exchange translation for the group estimated at GBP500 million, the same as it has previously announced.
British insurer Old Mutual said it has acquired UK-based discretionary investment manager Quilter Cheviot for up to GBP585 million. The FTSE 100-listed company says that the acquisition will generate annual synergies of GBP15 million by 2017. The company added that Quilter Cheviot's GBP16.2 billion funds under management moves Old Mutual towards the GBP92 billion goal for its wealth management business.
Still ahead on Friday is eurozone construction output for August at 1000 BST and US Reuters/Michigan consumer sentiment index for October, released at 1455 BST.
By Neil Thakrar; [email protected]
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