26th Sep 2013 12:46
LONDON (Alliance News) - London's main equity markets are trading relatively flat as US monetary decisions weighs on investor sentiment.
UK stock markets have been trading in tight ranges Thursday as investors await news about a possible US government shut-down. With federal budget talks seemingly no closer to being resolved, the government will run out of money to operate if an agreement cannot be reached by Tuesday next week.
Alongside this is the oncoming mid-October deadline to negotiate a higher US government debt limit. Congress has been told by Treasury Secretary Jack Lew that if the ceiling is not increased, the Treasury will exhaust its emergency borrowing measures no later than October 17.
The negotiations have been complicated by Republican attempts to use the discussions to roll-back US President Barack Obama's healthcare law. Senate Majority Leader Harry Reid, a Democrat, vowed that he would not allow this to occur.
Prior to the US market open, The FTSE 100 is 0.1% higher at 6,556.43, the FTSE 250 is 0.2% lower at 14,998.77, whilst the AIM All-Share index is up 0.2% at 790.74.
Despite the relative stability of the indices, there has been some large movements at the equity level.
TUI Travel, up 2.4%, is the biggest riser on the FTSE 100. The travel company has increased its underlying operating profit growth forecast and said that it expects to achieve full-year profit growth of at least 11% on a constant currency basis. The company has also reported strong high-season summer trading in the UK and Nordics. It said that so far it has sold around 31% of its overall mainstream programme for the winter 2013/2014 season.
Conversely, Thomas Cook Group, down 4.7%, is one of the biggest fallers on the FTSE 250. Despite reporting positive conditions, traders have reacted negatively to the company as it left its profit forecasts unchanged compared to the upgrade at big rival TUI Travel.
Centrica, down 2%, and SSE, down 1.6%, are two of the biggest blue-chip losers. The fall comes on back of the Labour leader Ed Miliband's announcement this week that he would freeze gas and electricity prices should he be voted into power in 2015.
Strong US economic data has seen the dollar strengthen against its rivals.
US jobless claims figures have decreased by 4,000 to 305,000, beating the consensus forecasts cited by FXstreet.com of an increase to 325,000.
US GDP data shows an un-revised increase to 2.5% in the second quarter.
The dollar is trading at 98.901 against the yen, 1.6032 against the sterling, and 1.3495 against the euro.
Wall Street is being called to open higher. The Nasdaq is expected to open up 0.6%, the DJIA up 0.2%, and the S&P up 0.2%
Still to come in the data calendar Thursday is US pending homes sales information at 1330 BST. EIA natural gas storage change is expected at 1530, before Kansas Fed manufacturing activity information at 1600 BST.
By James Kemp; [email protected]
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