19th Jan 2015 07:29
LONDON (Alliance News) - London markets are forecast to tick higher Monday in quiet trade as investors take stock of a volatile week just past and look ahead to an expected announcement from the European Central Bank of new stimulus measures and to minutes from the Bank of England's latest policy meeting, both due later in the week.
The FTSE 100 is forecast to open 12 points higher at 6,572, up from Friday's close of 6,550.27, when the index clawed its way back from morning losses to end up 0.8%.
"As the dust continues to settle after last week?s shock action from the Swiss National Bank to abandon its currency peg, attention now shifts this week to one of the potential catalysts for last week?s Swiss central bank about turn, namely a widely anticipated decision by the European Central Bank to start a sovereign bond buying program that would have swept away the SNB?s currency cap," says Michael Hewson at CMC Markets.
The ECB holds its first policy meeting of the new year on Thursday with many in the market expecting President Mario Draghi to announce a broadening of stimulus to include buying sovereign debt to add liquidity to the eurozone economy. An advisor to the European Court of Justice last week cleared the way for Draghi to launch a government bond-buying programme, a prospect which is thought to be behind the Swiss National Bank's surprise decision to drop its currency peg for the franc against the euro.
Brent crude is quoted at around USD50.11 a barrel Monday, back above USD50 for the first time in a week after touching a new six-year low of USD45.16 during Tuesday's session last week. US benchmark West Texas Intermediate was quoted at USD48.69 a barrel, up from a low of USD44.17 last week.
US markets are closed Monday for Martin Luther King Jr Day.
In UK corporate news, brewer and pub operator Greene King said its like-for-like retail sales rose 2% over the Christmas period, contributing to a 0.6% rise in the 36 weeks to January 11.
Chocolatier Thorntons said its second-quarter comparable retail sales were up 5%, helped by a 7.8% rise in like-for-like sales in December.
Japan's Nikkei closed up 0.8% at 17,014.29, helped by industrial production figures which declined less than initially estimated in November. Industrial production dropped a seasonally adjusted 0.5% month-on-month in November, revised from a 0.6% fall. In October, production grew 0.4%.
The Hang Seng in Hong Kong is down 1.9% at 23.638.09, and the Shanghai Composite ended 7.7% lower at 3,116.351, sparked by a Chinese crackdown on margin trading. Margin accounts allow consumers to buy stocks with money borrowed from their brokerage.
By Ian Edmondson; [email protected]
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