4th Mar 2014 07:37
LONDON (Alliance News) - Stocks across Europe are set to open higher Tuesday, amid reports that Russian President Vladimir Putin has ordered Russian military units back to their permanent bases.
Stocks fell sharply around the world on Monday, with the FTSE 100 losing almost 1.5%, amid investor concern that a Russian invasion of Ukraine was imminent. The morning reports from Russia's Interfax news agency that troops are being ordered to stand down is likely to be welcomed by equity markets.
The situation in Ukraine has been fast moving and, while the latest news is being welcomed by markets, the Ukraine and Russia are still a long way from resolution, and any further developments will be closely watched by investors Tuesday.
"Markets will have to get used to the idea that there is unlikely to be a speedy solution to this issue given yesterday?s comments by the Ukrainian Prime Minister saying it ?will never give up? Crimea," says CMC Markets chief market analyst Michael Hewson.
For now however, spread betters are indicating that the FTSE 100 will open strongly, up about 1.0% at 6,775 points.
A better night in Asia also is creating a healthier mood ahead of the European market open. Equity markets are broadly higher, with the exception of the Shanghai Composite which is down about 0.2%.
In the economic calendar Tuesday, construction PMI for February, released at 0930 GMT, will provide the morning UK focus. The expectation is for a slight slowdown in activity and a reading of 63.0, down from 64.6 in January. Some analysts are looking for a bigger drop, however, given the recent flooding and consequential disruption to services.
Eurozone PPI data is due at 1000 GMT and expected to show a fall in producer prices of 0.1% month-on-month in January, and a 1.3% fall on a yearly basis.
In the afternoon, the US Redbook of retail sales is due at 1355 GMT, followed by the New York ISM index of business conditions at 1445 GMT. Analysts are expecting a drop in the index to 63.2 in February, from 64.4 in January.
With the market focus on tensions between Ukraine and Russia, Monday's data releases were largely overshadowed, but the US ISM manufacturing index showed activity in the sector expanding faster-than-expected, with the index rising to 53.2 in February, from 51.3 in January. The reading raises hopes for a pick-up in US economic data, following a string of disappointing readings that have been been impacted by winter storms.
Gold and oil are both off the highs made on Monday due to the Ukrainian situation. Gold is about USD20 below its Monday high, currently trading at USD1,338.60 per ounce. Oil is almost USD2 off its 2014 high made Monday, currently trading at USD110.52 per ounce.
The pound and the euro are also both slightly higher against the dollar, currently trading at USD1.6680 and USD1.3760 respectively.
In the corporate calendar Tuesday, full-year results are already out from Serco, Fresnillo, Glencore Xstrata and Perform Group amongst others.
By Jon Darby; [email protected]; @jondarby100
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