29th Sep 2014 06:33
LONDON (Alliance News) - UK stocks are set to open marginally lower as the strength of the dollar over the weekend lures money into the foreign exchange market and away from stocks. Continued protests in Hong Kong also are causing some concern among equities investors.
Futures indicate the FTSE 100 to open 8 points lower at 6,641.1. The index closed at 6,649.39 on Friday.
The US dollar has been appreciating against major currencies over the weekend and now trades the pound at GBP0.616591 and the euro at EUR0.789397.
"The strength of the US dollar is forcing investor to move away from a lot of the stock market assets and put it into the greenback," says Alpari chief market analyst James Hughes. "With a potential rate hike becoming more likely and the data showing constant improvement it?s no surprise we are seeing the positive move."
Tens of thousands of demonstrators blocked major streets in Hong Kong on Monday as protests widened against China's decision to restrict open elections in the territory. Some commuters were unable to get to work when protesters refused to open up passage. More than 200 bus routes have been suspended or rerouted, according to the city's Transport Department, while police used tear gas, pepper spray and baton charges overnight, but failed to disperse protesters.
"The Communist government [in China] has a tight grip on its economy and its politics but this weekend?s protests for democracy and resulting police tear-gassing of protesters in Hong Kong is a reminder that caution should be exercised in assuming this grip is unbreakable," says CMC Markets analyst Jasper Lawler.
The Hang Seng is trading 2.2% lower amid the protests, while the Shanghai Composite trades flat. In Japan, the Nikkei closed the day up 0.5%.
Aberdeen Asset Management has said in a trading update that its assets under management have risen by 3% to GBP331.2 billion at the end of August. The FTSE 100 company added that net outflows have moderated to GBP1.7 billion for the two months to the end of August and that equity capabilities are recovering.
Fellow FTSE 100 constituent BAE Systems has said, in an interim management statement, that it has incurred a goodwill impairment of GBP70 million due to the sale of its South African arm. The company also said that group order intake from January 1 to August 23 was GBP7.9 billion, including GBP2.6 billion from non UK/US markets.
It is a fairly heavy day Monday in terms of economic data, beginning with a series of domestic releases, with the highlights being consumer credit and mortgage approvals for August, both released at 0930 BST. The focus will turn to Germany at midday when consumer price index and harmonised index of consumer prices for September are released at 1300 BST.
In the afternoon, there will be a host of data released from the US, including personal income and core personal consumption expenditure for August at 1330 BST.
By Neil Thakrar; [email protected]
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