18th Nov 2013 07:46
LONDON (Alliance News) - UK equities are set to open fractionally lower Monday as investors ignore strong gains in both the US Friday and Asia overnight, opting to remain cautious ahead of data releases later in the week.
US stocks were boosted Thursday and Friday after Yellen suggested that the Fed is not yet ready to taper its USD85 billion-a-month asset buying programme, effectively ensuring the continued availability of cheap money.
"We consider it imperative to do what we can to promote a very strong recovery," she said.
Friday saw the Nasdaq Composite close 0.3% higher, the S%P 500 close up 0.4%, and the DJIA close up 0.5%. At 15,961.70, the Dow now is within touching distance of 16,000 points.
Alongside this, the promises of reform announced in China on Friday is expected "to translate into commentary that risk is on," says CitiFX Wire's Lee Oliver. "News that China will allow greater private investment in state-controlled industries, loosen the country's one-child policy and expand farmers' land rights has resulted in strong moves higher in many Asian bourses."
Ahead of the London open, the Hang Seng is up 2.6%. The Nikkei, however, is trading close to flat. "This may because it made its move last week, when it rallied by a more than solid 7.7%," says Oliver.
Both IG and CMC Markets indicate the FTSE 100 to open slightly lower.
"Given the problems in Europe, the focus will once again be on economic data," says Michael Hewson, chief market analyst at CMC markets.
"The main attention is likely to be on the preliminary PMI numbers for France and Germany on Thursday after last week?s disappointing GDP numbers for Q3 for France, Italy and Germany, with markets hoping that the continuing divergence between the German and French economies starts to show signs of reversing, or continues into November," he adds.
In data released overnight, average asking prices of a property in the UK declined in November, in line with the usual pre-Christmas trend, a monthly survey by Rightmove revealed. Prices fell 2.4% on a month-on-month basis, following a 2.8% surge in October. However, compared with an average November fall over the last three years, this year's drop was slightly more muted.
"The excitement about Help-to-Buy's early launch failed to buck the seasonal trend of a fall in new sellers' average asking prices," Rightmove director Miles Shipside said. The UK government's Help-to-Buy scheme, aiming to help first time buyers enter the property market, has seen Rightmove traffic increase by 30% since its introduction in September, when compared to the same period in 2012.
Still to come in the data calendar Monday, EU current account information is released at 0900 GMT, ahead of trade balance figures at 1000 GMT. In the US, the National Association of Home Builders housing market index is scheduled for 1500 GMT.
Blue-chip Petrofac has been joined by FTSE 250-listed Unite Group, amongst others, in releasing interim management statements Monday. FTSE 250-listed Aveva Group, amongst others, has released interim results.
Rolls Royce has announced a GBP5 billion order from the Dubai Airshow, and Aberdeen Asset Management has confirmed its acquisition of Scottish Widows Investment Partnership.
By James Kemp; [email protected]; @jamespkemp
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