20th Oct 2014 06:23
LONDON (Alliance News) - UK stocks are set to open higher Monday, continuing Friday's rally and following on from a strong trading session in the US at the end of last week, and gains made in Asia Monday morning.
After a volatile week for European and US equities, in which the FTSE 100 traded within a 332 point range, Monday is likely to be relatively calmer with little in the way of economic data.
Futures indicate the FTSE 100 will open 27 points higher at 6,336.8. The index closed at 6,310.29 on Friday.
"While we still closed lower for the fourth week in succession, the resulting snap back on Thursday and Friday will inevitably have made the bears much more cautious about being caught out again, and that could well put a short term floor under markets," says CMC Markets chief market analyst Michael Hewson.
"It will also have emboldened the bulls in the market, that irrespective of whether the data is good or bad, in the belief that central banks have their backs, and that stock markets could well resume their upward momentum," he adds.
Trading in the US Friday was strong, with the DJIA closing up 1.6%, the S&P 500 up 1.3% and the Nasdaq Composite up 1.0%. Stocks in Asia have followed the US lead Monday with the Nikkei in Japan closing up 3.8%, while the Hang Seng in Hong Kong continues up 0.5%, and the Shanghai Composite trades up 0.4%.
The German producer price index for September came in line with expectations. The year-on-year figure showed a fall of 1.0%, from a 0.8% decline in August, while the month-on-month print came in flat, from a 0.1% decline in the previous month.
"Although German producer prices for September are the only notable data to be published [Monday], mounting concerns about euro area deflation mean that they are likely to grab more market attention than normal," says Jonathan Thomas, a senior economist at Lloyds Bank.
The investigation into Tesco's GBP250 million profit overstatement has found evidence of a cover-up as the commercial team at the company struggled to meet targets in the final months of the tenure of former chief executive Philip Clarke, The Sunday Times reported. The company is expected to say when it posts half-year results on Thursday that the review found patterns of "inappropriate" behaviour by staff, but that it will not have to restate its results for previous years, the paper said.
Irish drugmaker Shire said it had started an immediate search for a new chief financial officer, after James Bowling, who was interim CFO, decided to leave to become CFO of Severn Trent. Bowling will leave Shire at the end of the first quarter of 2015. In a separate statement, water company Severn Trent confirmed that Bowling will be joining, after current CFO Mike McKeon gave notice that he has decided to retire with effect from spring 2015. McKeon will be staying in post to ensure an orderly handover, it added.
Still ahead on Monday is eurozone current account data for August, to be released at 0900 BST and Italian industrial orders and sales for August at 0900 BST as well.
By Neil Thakrar; [email protected]
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