2nd Mar 2015 07:42
LONDON (Alliance News) - UK stocks are set to open slightly lower Monday as the People's Bank of China cut interest rates for the second time in less than four months at the weekend.
IG futures indicate the FTSE 100 to open 6.7 points lower at 6,940.0. The index closed slightly lower Friday at 6,946.66 after touching a new record intraday high of 6,967.24 just before the close.
In Asia Monday, the Japanese Nikkei 225 index continues its good form, closing up 0.2%. The Hang Seng trades up 0.1%, and the Shanghai Composite is up 0.8%.
The People's Bank Of China on Saturday said it has cut its one-year lending rate by 0.25 percentage point to 5.35%. The Chinese central bank also reduced deposit rates by 0.25 percentage points to 2.5%. The cut in rates came into effect on Sunday.
The bank has made the rate cut in order to stimulate the world's second-largest economy amid concerns of slowing economic growth. The country is facing a weakening property market, a higher proportion of investment being sent offshore and a growing risk of falling prices.
"The lack of movement in the markets following the surprise rate cut from the PBOC is a sign of the task ahead from an investors stand point. They clearly believe that this rate cut will be insufficient and much more needs to be done," says Craig Erlam, senior currency analyst at Oanda.
The manufacturing sector in China expanded at a faster pace than originally reported in February, the latest survey from HSBC showed on Monday with a revised PMI reading of 50.7.
That's up from 49.7 in January, and it was even higher than last month's flash estimate of 50.1 - and it moves even further above the boom-or-bust line of 50 that separates expansion from contraction.
Wall Street closed lower on Friday, with the DJIA ending down 0.5%, the S&P 500 closed down 0.3%, and the Nasdaq Composite ended 0.5% lower.
In the FTSE 100, Intertek Group reported lower profits for 2014, as the strength of the pound and weakness in its oil and gas business that's expected to continue into this year offset growth in its consumer products business.
The quality and safety testing company reported a pretax profit of GBP252.2 million for 2014, down from GBP281.8 million in 2013, as revenue fell to GBP2.09 billion, from GBP2.18 billion. Its closely-watched pretax profit excluding restructuring costs and cash outflows and amortisation related to acquisitions, fell to GBP300.2 million from GBP314.9 million.
British Land Co said it has bought the Surrey Quays Leisure Park in Canada Water for GBP135 million, completing its strategy of snapping up assets in the area as part of a regeneration plan.
The property developer has now spent GBP250 million on property in Canada Water over the last five years, and is adding the leisure park to the Surrey Quays Shopping Centre and Harmsworth Quays, the former Daily Mail General Trust printing works, it already owns. The land it owns covers nearly 50 acres.
In other UK corporate news, there are full-year results from insurer Amlin, specialist insurer Hiscox, aerospace, defence, and energy engineering company Senior, Alent and Ultra Electronics.
In the economic calendar Monday, there is the Markit manufacturing Purchasing Managers' Index from France at 0845 GMT, Germany at 0855 GMT, the eurozone at 0900 GMT, the UK at 0930 GMT, and the US at 1445 GMT. European consumer prices and unemployment rate are at 1000 GMT, before US ISM manufacturing PMI at 1500 GMT.
By Neil Thakrar; [email protected]; @NeilThakrar1
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