15th Jan 2015 07:03
LONDON (Alliance News) - London stocks are set to rebound Thursday from sharp falls suffered on Wednesday, as worries over the health of the global economy subside somewhat despite Wall Street closing lower after the World Bank cut its global growth forecasts.
The FTSE 100 is forecast to open 75 points higher after Wednesday's 2.4% drop to 6,388.46, its biggest one-day fall since mid-December, dragged down by mining companies after copper prices sank to a five-year low.
Wall Street ended lower Wednesday, with the DJIA closing down 1.1% at 17,427.09.68, hampered also by US retail sales figures for December, which recorded a 0.9% drop from November.
"The stock market sell-off seen across the board yesterday appears to have been brought about concerns about the prospects for growth in China and in Europe weighing on sentiment, reinforced by sharp declines in the copper price as it dropped sharply to its lowest levels since 2009," says Michael Hewson at CMC Markets.
"Further data deterioration could well prompt a delay in the tightening of policy by the Federal Reserve in the coming months, with the possibility that the rate hike currently being expected by the market sometime this year, may not happen at all until 2016," Hewson adds.
The World Bank said the global economy is forecast to grow moderately this year, citing stronger growth in the US and Britain but weakness in the euro zone and Japan. "The forecast for Euro Area growth is a sluggish 1.1% in 2015, rising to 1.6% in 2016-17," the World Bank said, cutting its 2015 forecast from 1.8% previously and 2016 from 1.9%.
Brent crude is quoted up at around USD49.20 a barrel early Thursday after touching a new six-year low of USD45.16 during Tuesday's session. US benchmark West Texas Intermediate was quoted at USD48.03.
The euro area trade balance is due at 1000 GMT ahead of weekly US jobless claims at 1330 GMT and the Philadelphia Fed Manufacturing Survey
at 1500 GMT.
In corporate news, Primark-owner Associated British Foods reports first quarter earnings, Home Retail Group and Mothercare issue third quarter earnings updates, and Bovis Homes has a trading statement.
Japan's Nikkei closed up 1.9% at 17,108.7. The Hang Seng in Hong Kong is up 0.5% at 24,232.49, and the Shanghai Composite is 2.8% higher at 3,3.15.224.
By Ian Edmondson; [email protected]
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