26th Sep 2014 06:33
LONDON (Alliance News) - UK stocks are set to open slightly lower Friday, following a heavy sell-off into the close on Thursday and with little in the way of fresh data to drive markets further until the final reading of US second quarter GDP later in the day.
Futures indicate that the FTSE 100 will open just 2 points lower at 6,638.
A relatively quiet European trading session for most of Thursday gave way to a heavy sell-off at the end of the day, as US markets opened lower after some reasonable economic data that sparked concerns of an early interest rate rise, and amid rumours of a potential retaliation by Russia against western sanctions.
A draft law has reportedly been submitted to the Russian parliament that would allow the seizure of foreign assets on Russian soil, which has been seen by the markets as a retaliation against recent sanctions.
"If there's confirmation regarding a proposed piece of legislation in Russia to allow foreign asset-seizure; the DAX with Germany?s strong Russian trading ties and the FTSE 100 with the UK?s large energy-investment in Russia could see another bout of selling," said CMC Markets analyst Jasper Lawler.
Futures in Germany indicate the DAX 30 will open more than 0.1% lower, after falling 1.2% on Thursday.
US and Asian markets both went on to record heavy losses after the European close Thursday. The DJIA suffered its worst one day fall in almost two months, dropping 1.5%, while the S&P 500 fell 1.6%, and the Nasdaq Compose fell 1.9%.
Apple shares accounted for part of the Nasdaq decline, closing almost 4% lower amid concern over the bending of some its new iPhones. The company has played down the concerns, saying only nine customers had contacted the company to complain about a bent iPhone 6 plus since it started selling the phone last Friday.
The Nikkei has closed down 0.8%, while the Hang Seng continues 0.4% lower, and the Shanghai Composite is just fractionally lower.
The UK parliament will vote Friday over whether to join the US with air strikes in Iraq. A vote in favour is broadly expected, given that opposition leader Ed Miliband has already expressed his support. The vote comes amid warnings from Iraq's Prime Minister that a terrorist plot to attack the New York and Paris subways has been uncovered. The terrorist threat further weighed on sentiment Thursday and any fresh news may serve to keep markets on edge into the weekend.
The German Gfk consumer confidence survey fell further than expected to 8.3 in October from 8.6 in September. Economists has been expecting a fall to 8.5.
The euro remains near its lowest level for almost two years ahead of the equity market open, currently trading at USD1.2743. With no UK data Friday the pound is little moved, currently trading at USD1.6305
Final US second quarter GDP at 1330 BST provides Friday's data highlight. Economists expect a final print of 4.6%, an upwards revision from the second estimate last month of 4.2%. The reading would confirm a strong bounce from the 2.1% drop in the first quarter.
The Reuters/Michigan consumer sentiment index for September follows at 1455 BST, with analysts looking for an improvement to 84.7 from 82.5 in the previous month.
Bank note printer De La Rue may be in focus at the open of the London market after issuing a profit warning, just weeks after seeing a share price boost when it was named as the preferred bidder for the contract to print notes for the Bank of England for another ten years.
Lloyds Banking Group said it raised GBP161 million in the TSB stake sale it announced late Thursday. It sold 57.5 million TSB shares at 280 pence each, taking its stake down to about 50%.
By Jon Darby; [email protected]; @jondarby100
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