6th Feb 2014 07:38
LONDON (Alliance News) - UK stocks are called to open marginally higher Wednesday, shrugging off a lower close on Wall Street overnight, as investors await interest rate decisions from both the UK and the eurozone.
Meanwhile, market participants in London face another day of transport disruptions as the 48-hour strike on the London Underground continues.
Despite the NASDAQ Composite closing down 0.5%, the S&P 500 closing down 0.2%, the DJIA closing fractionally lower, and Asian stocks trading mixed ahead of the London stock market open, UK equities are called higher Thursday. Both IG and CMC Markets indicate the FTSE 100 to open up at approximately 6,480 points, having closed at 6,457.89 on Thursday.
Interest rate decisions from both the Bank of England and the European Central Bank will be in focus Thursday.
The BoE will release its latest policy decision at midday. Despite the bank announcing that there would be no discussion of rate rises until UK unemployment has hit 7.0%, the jobless rate has fallen much faster-than-expected. Nevertheless, commentators widely expect the bank's governor Mark Carney to keep interest rates steady at a record-low 0.5%.
However, "of more immediate interest is how the MPC (Monetary Policy Committee) will choose to guide markets as its official forward guidance approaches expiry," says Nikesh Sawjani, UK macro-economist at Lloyds Bank.
"We do not think that this is something the MPC will communicate today, with no change in policy accompanied by no statement, but it will be the key focus of the Inflation Report press conference the following week," Sawjani adds.
Similarly, the ECB is also set to meet Thursday, with no changes to its policy expected. The ECB decision on interest rates will be announced at 1245 GMT, with a press conference starting 1330 GMT.
That said, "there has been speculation that the headline rate could well get cut from 0.25% to 0.1%," says Michael Hewson, chief market analyst at CMC Markets. "While that could well happen no one seriously thinks that even if it did it would make much difference to economic conditions in Europe," he adds.
Away from interest rate decisions, German factory orders numbers are released at 1100 GMT Thursday. US jobless claims, released at 1330 GMT, will be in focus ahead of the release of US non-farm payrolls on Friday. The Bureau of Economic Analysis releases the US trade balance for December at the same time.
In the corporate calendar, FTSE 100-listed AstraZeneca and Smith & Nephew have released full-year results ahead of the equity market open Thursday, while blue-chip TUI Travel has released its first quarter results.
AstraZeneca has reported that its pretax profits fell to USD3.28 billion in 2013, from USD7.65 billion in 2012, with revenues down 6%. Smith & Nephew said its pretax profit dropped to USD802 million in 2013, from USD1.09 billion in the previous year, while revenues increased slightly to USD1.18 billion from USD1.08 billion.
In other news, FTSE 100-constituents Compass Group and Vodafone have been joined by FTSE 250-listed LondonMetric Property, Grainger, Supergroup and Enterprise Inns, amongst others, in releasing interim management statements.
By James Kemp; [email protected]; @jamespkemp
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