30th Mar 2015 06:41
LONDON (Alliance News) - UK stocks are set to open higher Monday following a positive end to trading on Wall Street on Friday and a strong performance in Asian stocks overnight as central bankers from the US and China showed a doveish stance.
IG says futures indicate the FTSE 100 will open 25.4 points higher at 6,880.4. The index closed down 0.6% at 6,855.02 Friday as the heavily weighted commodity sector underperformed.
Walls Street ended higher on Friday. The DJIA closed up 0.2%, the S&P 500 ended up 0.2% and the Nasdaq Composite closed up 0.6%.
US stocks broke a four-day losing streak on Friday after US Federal Reserve Chair Janet Yellen struck a cautious note on interest rates, saying a rate hike may be warranted later this year, but any increase in interest rates would be gradual and data dependent.
"With continued improvement in economic conditions, an increase in the target range for that rate may well be warranted later this year," Yellen said at the San Francisco Fed conference. "Of course, the timing of the first increase in the federal funds rate and its subsequent path will be determined by the Committee in light of incoming data on labour market conditions, inflation, and other aspects of the current expansion."
Craig Erlam, senior market analyst at Oanda, says Yellen's comments means that a rate hike in June is now even more unlikely.
In Asia on Monday, the Japanese Nikkei closed up 0.7%. The Hang Seng is up 1.7%, and the Shanghai Composite trades up 2.5%.
Asian stocks were lifted as the People's Bank of China Governor Zhou Xiaochuan indicated that the central bank could ease its monetary policy further if required.
"We need to be vigilant to see if the disinflation trend will continue to reach some sort of deflation or not," Xiaochuan said adding China has room to act if inflation continues to fall.
Investor focus will also be on Greece after Prime Minister Alexis Tsipras said in remarks published Sunday he is looking for a "happy ending" in his current talks with EU creditors. "I am confident there will be a happy ending soon to this first phase of the negotiations, and to normalizing the situation," Tsipras said.
Athens is set to present a list of economic reform proposals to international creditors Monday after Tsipras's earlier reform plans met resistance from EU leaders.
In the corporate calendar there are final results from Polymetal International, and Al-Noor Hospitals Group and a trading update from Compass Group.
Rolls-Royce Holdings said Air China has selected the British company's Trent 1000 engines and its aftercare support to power 15 new Boeing 787-9 Dreamliner aircraft, building on a relationship the two companies already have and adding to Rolls-Royce's USD1 billion order book.
In the economic calendar, there is UK consumer credit and mortgage approval data at 0930 BST, eurozone consumer confidence is at 1000 BST ahead of German consumer prices at 1300 BST. Later in the day US personal income and spending data is at 1330 BST and pending home sales is at 1500 BST.
By Neil Thakrar; [email protected]; @NeilThakrar1
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