7th Nov 2014 07:38
LONDON (Alliance News) - UK shares are set to open higher ahead of the first US nonfarm payroll report following the conclusion of US Federal Reserve quantitative easing.
Futures indicate the FTSE 100 to open 14 points higher at 6,564.8. The index closed at 6,551.15 on Thursday.
Shares across Europe received a boost from doveish comments made by European Central Bank President Mario Draghi Thursday, but while the effects faded in the UK, the French CAC 40 and the German DAX 30 managed to hold onto gains to close up 0.5% and 0.7% respectively.
Draghi said that the new asset-backed security purchase program will last for at least two years and will seek to grow the size of the central bank's balance sheet back towards its 2012 level. This will mean the ECB expanding its balance sheet to EUR3 trillion, from the just above EUR2 trillion it stands at now. Draghi said that the governing council was unanimous in this decision, and moreover that it is unanimous in standing ready to use additional unconventional stimulus measures if necessary. The ECB also kept interest rates at their all-time low, as expected.
US trading had a fairly strong trading session Thursday, with the DJIA and the S&P 500 both closing up 0.4%, having both hit all-time highs. The Nasdaq Composite, meanwhile, closed up 0.2%.
In Asia, the Japanese Nikkei outperformed after strong foreign investment numbers overnight. The index closed up 0.5%. The Hang Seng and the Shanghai Composite are both off 0.3%.
The only data release Friday, before London equity markets open was industrial production and trade balances from Germany. Industrial production grew by less-than-expected in September, showing only a 1.4% month-on-month rise, missing the expected 2% growth forecast. The figure did, however, show an improvement on the 3.1% decline in August.
German seasonally adjusted trade surplus came in-line with expectations in September at EUR18.5 billion, however both imports and exports grew by more than expected. Exports, showed a month-on-month rise of 5.5%, surpassing the 1.85% growth forecast, and significantly better than the 5.8% decline in August. Imports grew by 5.4%, ahead of the consensus of an 0.8% rise and August's reading of a 1.3% fall.
National Grid reported a rise in first half pretax profit to GBP1.18 billion from GBP1.05 billion in the comparable period last year. The group also declared an interim dividend of 14.71 pence and said it is on track to deliver strong overall returns in the full-year.
FTSE 100-listed non-life insurer Admiral Group reported a 3% fall in third-quarter turnover, hit by a drop in its UK car insurance business, though its expectations for that main profit driver remain on track for the current financial year, thanks to positive claims development on its back years. The company reported turnover of GBP513 million in the quarter ended September 30, compared with GBP528 million in the corresponding quarter last year, and said it remained optimistic on the group's prospects of growth.
The key event Friday will be US October nonfarm payrolls, to be released at 1330 GMT, along with wage and unemployment rate data at the same time.
"In the wake of last week?s Federal Reserve decision to end its asset purchase program and subsequent positive statement, hopes are high that the US recovery matches the change in tone of the aforementioned statement," says Michael Hewson, chief market analyst at CMC Markets. "Some of the data this week certainly speaks to a continued improvement in the labour market, particularly with respect to the internals of the two October ISM manufacturing and services reports earlier this week."
Also in the calendar is UK trade balance data at 0930 GMT.
By Neil Thakrar; [email protected]
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