11th Mar 2015 07:36
LONDON (Alliance News) - UK share prices are indicated to open higher Wednesday, recovering some of its losses Tuesday when stocks fell on weak commodities prices due to a strong dollar and weak Chinese economic data.
IG indicates the FTSE 100 to open 16.3 points higher at 6,719.1. The index closed down 2.5% at 6,702.84 Tuesday, marking its worst one-day fall since October 15.
"Given the heavy falls we saw yesterday it wouldn't be too much of a surprise to see a bit of rebound today, with a slightly higher open expected this morning, but if the euro were to continue its precipitous slide of the last few days lower then it wouldn?t surprise too much to see equities follow suit," says Michael Hewson, chief market analyst at CMC Markets.
"Concerns about the events between Greece and Europe, a slowdown in China, the effect of negative yields on the still fragile European financial sector, and a US rate rise makes for a volatile cocktail for investors to digest," Hewson adds.
Ahead of the open Wednesday the dollar has held onto its strong position, with the euro trading at USD1.0681, close to 12 year lows. In addition to general dollar strength on expectations of a US interest rate hike, the euro is being weakened by ongoing European Central Bank sovereign bond purchasing and continued concerns about a possible Greek exit from the eurozone.
Brent oil trades at USD56.51 a barrel ahead of the open, while US benchmark West Texas Intermediate trades at USD48.72 a barrel.
Wall Street also closed heavily lower Tuesday, with the DJIA ending down 1.9%, the S&P 500 down 1.7%, and the Nasdaq Composite off 1.7%.
In Asia Wednesday, the Japanese Nikkei closed up 0.3%, while the Hang Seng trades down 0.7% and the Shanghai Composite is up 0.2%.
China's industrial production and retail sales growth slowed more than expected in February, data from the National Bureau of Statistics showed. Industrial production increased 6.8% year-on-year in January to February, while it was forecast to grow 7.7%. In December, production advanced 7.9%. Retail sales in the same period grew at a pace of 10.7%, slower than a 11.9% rise seen in December. Sales were expected to rise 11.6%.
Tullow Oil said it has plugged and abandoned an exploration well in an onshore block in Kenya after failing to find any significant oil or gas. In a statement, the oil company said it had drilled the Engomo-1 exploration well on Block 10BA in Kenya down to a total depth of 2,353 metres, but failed to find any significant oil or gas shows.
Hikma Pharmaceuticals posted a rise in pretax profit for 2014, as strong growth in its injectibles business helped offset declines in its branded and generics businesses, and it forecast revenue growth of 6% at constant currency for 2015. The drugmaker proposed a final dividend of 15.0 cents per share, and a special dividend of 6.0 cents, taking its total dividend for 2014 to 32.0 cents, up 19% from 27.0 cents in 2013.
Bwin.Party Digital Entertainment said it swung to a loss in 2014, hit by a writedown on its poker operations as that business suffered a 29% decline in revenue due to the loss of its Greek market and challenging conditions in several other markets.
The online gaming company reported a pretax loss of EUR97.9 million for 2014 compared with a EUR44.9 million profit in 2013, as revenue dropped to EUR611.9 million from EUR652.4 million. It booked a EUR104.4 million non-cash impairment charge, mainly for the poker operations writedown.
N Brown Group warned that pretax profit from continuing operations will be below its guidance and current market expectations of GBP88 million in the current financial year, after it reduced prices in the fourth quarter to clear stock and compete in the fashion sector.
There were also full-year results from estate agency Foxtons Group, and recruitment company Michael Page International, and a trading statement from Boohoo.com.
In the economic calendar, European Central Bank President Mario Draghi will be speaking in Frankfurt at 0800 GMT, UK industrial and manufacturing production for January is at 0930 GMT, and US MBA mortgage applications for the week ending March 6 is at 1100 GMT.
By Neil Thakrar; [email protected]; @NeilThakrar1
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