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MARKET COMMENT: UK Shares Called To Push Higher On Open Friday

15th Nov 2013 07:39

LONDON (Alliance News) - UK stocks are set to open slightly higher Friday, having posted strong gains Thursday, as incoming Federal Reserve Chairwoman Janet Yellen's comments in her confirmation speech continue to have a positive effect on equities.

"While US equity markets continue to post new record highs as US investors continue to believe that monetary stimulus is the answer to all its problems, Asia markets have followed suit with a similarly positive session," says Michael Hewson, chief market analyst at CMC Markets.

Yellen's speech boosted equities Thursday as she warned that US unemployment remains too high for the central bank to consider the tapering of its USD85 billion-a-month asset buying stimulus. This suggest the Fed will continue to pump cheap money into the US economy for a while longer.

The DJIA closed 0.4% higher Thursday, the Nasdaq Composite closed up 0.2%, and the S&P 500 closed up 0.5%. Asian markets also look set to close higher, with the Hang Seng currently trading 1.6% higher and the Nikkei up 2%.

CitiFX Wire's Nishtha Asthana believes that the Friday session will see the "market continue to talk about Yellen's comments and question-and-answer session in more details."

Both IG and CMC Markets indicate the FTSE 100 to open marginally higher Friday.

CMC's Hewson, however, expects a divergence between the US and Europe. "European markets don?t appear to be following the same script," he says, "even though they are also expected to open a little higher this morning." While global markets gained as a result of Yellen's comments, "the problem is the lower-than-expected growth number from not only Europe, but also Japan, appears to suggest that the picture remains anything but rosy in the global economy."

The latest inflation data from the EU is expected to confirm the weakness in the single-currency area for October, coming in at 0.7%, from 1.1% previously. EU CPI numbers are scheduled for 1000 GMT.

In the US, industrial production figures are released at 1415.

In the corporate calendar, blue-chip Vedanta Resources has been joined by FTSE 250-listed Rotork PLC in releasing interim management statements prior to the London open.

By James Kemp; jameskemp@alliancenews.com; @jamespkemp

Copyright 2013 Alliance News Limited. All Rights Reserved.


Related Shares:

Vedanta ResourcesRotork
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