16th May 2014 06:32
LONDON (Alliance News) - UK shares are set to open quietly Friday as investors take stock following Thursday's heavy equity selling amid a round of disappointing eurozone economic data.
Economic growth numbers from across the eurozone Thursday sharpened the picture of a two-speed Europe, with only Germany managing to grow faster than expected, and many of the periphery nations actually contracting. The key eurozone consumer price inflation data also remained subdued, at just 0.2% in the first quarter, half of the 0.4% that had been forecast.
"Thursday's data were, in a word, disappointing," said Rabobank analyst Michael Every in a morning note to clients.
Asian markets continued the trend lower overnight, despite China recording a recovery in foreign direct investment in April, attracting USD8.7 billion over the month, up 3.4% after falling by 1.5% in March. Japanese industrial production data overnight also showed a rise of 0.7% in the month of March, beating expectations for a rise of just 0.3%.
Even so, the Nikkei closed down 1.7%, the Hang Seng is down 0.6%, and the Shanghai Composite is down 0.5%.
The FTSE 100, having lost 0.6% on Thursday to close at 6,840.89, is expected to open flat to fractionally higher Friday.
"A somewhat quiet end to the week is expected today, as the European markets take a breather following yesterday?s GDP and CPI fuelled rollercoaster," said Alpari research analyst Joshua Mahony.
After equity markets have pulled back from near all time highs, it will be interesting to see if there is appetite to once again test those highs, or if another day of losses could "put to bed the idea that we are in break out territory and consign the markets to range-bound price action," says the analyst.
There's little in the economic data calendar to give direction Friday, however, with no top tier releases scheduled and nothing at all from the UK. Eurozone trade balance numbers are due at 0900 GMT and are expected to show a rise in the surplus to EUR15.5 billion in March from EUR13.6 billion in February.
From the US, building permits and housing starts data are due at 1230 GMT, followed by the Reuters/Michigan consumer sentiment index at 1355 GMT.
St Louis Fed President James Bullard, who is a non-voting member of the FOMC, will give a speech on the economy and monetary policy at 1550 GMT, which will be watched for insight to current central bank thoughts.
In the UK corporate calendar Friday, real estate investment group Grainger PLC has already released its interim results, while housebuilder Bovis Homes Group has put out an interim management statement. Interim statements are also out from Keller Group, Inchcape PLC, Brammer, Intertek Group, and John Menzies.
By Jon Darby; [email protected]; @jondarby100
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