14th Aug 2014 06:51
LONDON (Alliance News) - UK stocks are set to open lower despite strong trading overnight in the US and a mixed session in Asia, as markets react to German GDP data which came in lower than expected.
Futures indicate the FTSE will open 16 points lower at 6640.8 points.
After a strong opening in Wall Street and a boost from the Bank of England inflation report, the FTSE 100 closed higher on Wednesday. The BoE report outlined a cut in its wage growth forecast for 2014 following official data which showed the first fall in wages.
The pound, however, reached a ten-week low against the dollar after it took a hit amid the BoE report, which pushed out the UK rate-rise timetable.
Wednesday "did show that despite all of the positive numbers coming out of the UK, we do not yet have a fully recovered economy, and it could be a little while yet before we are in a position to move towards that sense of reality that people have been calling for," says James Hughes, chief market analyst at Alpari.
Meanwhile, German quarter-on-quarter GDP data released early Thursday showed the economy contracted by 0.2% in the second quarter, missing the expectation of flat and considerably below the previous result of 0.7% growth. These results highlight the struggle of the German economy where confidence has been particularly affected by the geopolitical tensions with Russia with whom it has close trade relations.
The German data comes ahead of the European GDP figure which is expected to come in at 0.7% year-on-year growth in the second quarter, down from 0.9% from the previous quarter. The results will be released Thursday 1000 BST.
In corporate news, a series of interim results have been announced. FTSE 250-listed Centamin PLC reported a pretax profit of USD11.3 million for the three months to June 30, down from USD51.7 million a year earlier, as revenue declined to USD102.6 million, from USD134.3 million. However the company declared a maiden interim dividend of 0.87 US cents per share.
In addition, Ophir Energy reported first half net profit of USD339.1 million, versus a USD19.4 million loss in the previous half. The company's board also approved a share buyback scheme of up to USD100 million.
By Neil Thakrar; [email protected]
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