25th Sep 2014 06:32
LONDON (Alliance News) - UK stocks are set to open fractionally higher Thursday following strong gains in the US and Asia overnight, but with little in the way of clear domestic market drivers until a speech from Bank of England Governor Mark Carney at 1340 BST.
Futures indicate that the FTSE 100 will open just a couple of points higher at 6,708.
The London market had a subdued trading session on Wednesday, with a slightly defensive bias evident among the sector movers, although the FTSE 100 did see a rally into the close after flat-lining for most of the day.
US stocks went on to put in a stronger performance, boosted by some much stronger-than-expected new home sales data that provided a positive surprise following a period of weakness. The DJIA closed up 0.9%, the S&P 500 gained 0.8%, and the Nazdaq Composite rose 1.0%.
US markets also were helped by the doveish tone struck by Chicago Fed President Charles Evans, who argued that US policy makers should be "exceptionally patient" and keep rates on hold until sufficient momentum is evident in the US economic recovery.
A relatively strong Asian session Thursday has seen the Nikkei close 1.1% higher, while the Shanghai Composite continues 0.8% higher, and the Hang Seng is just fractionally higher.
US President Barack Obama held a special meeting of the UN security council on Wednesday to call for a more collective approach to the threat of the spread of Islamic militants. Following the call, UK Prime Minister David Cameron has recalled parliament Thursday for an immediate vote over sending the RAF to join the air strikes in Iraq and Syria.
In UK corporate news Thursday, Sports Direct has announced its latest punt, taking out a put option on 23 million Tesco shares, or a 0.28% stake of the company. The move follows a recent heavy fall in the price of Tesco shares after the supermarket announced an accounting error in its first half profit guidance. The option would appear to be a vote of confidence from Sports Direct founder Mike Ashley in the ability of Tesco to turn its fortunes around.
Governor Carney will deliver a speech from Wales later in the afternoon. The BoE chief is speaking from the Institute and Faculty of Actuaries General Insurance Conference at 1340 BST. Just a week after the Scottish "no" vote, investors may be listening for Carney's thoughts on the issue.
Otherwise it's a very quiet morning for data, with nothing of any real interest for the markets from macroeconomic data until US durable goods numbers at 1330 BST. Economists expect durable goods orders to have fallen by 18% in August, after having risen by 22.6% the month before.
US initial jobless claims data is also due at 1330 BST, followed the US Markit services PMI and composite PMI for September.
By Jon Darby; [email protected]; @jondarby100
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