8th Oct 2014 06:28
LONDON (Alliance News) - UK stocks are set to open lower Wednesday, continuing to slide after suffering heavy losses on Tuesday and as markets await the release of the minutes of the September Federal Reserve policy meeting after the close of London trading.
Futures indicate that the FTSE 100 will open 25 points, or about 0.5%, lower at 6,471.
Stocks across Europe lost significant ground on Tuesday amid growth concerns after German industrial production data recorded the fastest monthly fall since the start of the financial crisis, and the International Monetary Fund warned of a 40% chance of the eurozone falling back into recession.
The confirmation of a case on ebola in Spain put a particularly big dent in the value of travel sector stocks, including airlines and holiday operators, as investors worried that a continued spread of the potential fatal disease will lead people to stay at home.
US stocks went on to suffer equally heavy losses, with the DJIA closing down 1.6%, the S&P down 1.5%, and the Nasdaq Composite down 1.6%.
The negativity has continued into the Asian session Wednesday, with the Nikkei closing 1.0% lower, and the Hang Seng continuing down 0.8%, while the Shanghai Composite is managing to hold on to gains of about 0.5% after returning from a week-long holiday.
The better performance in Shanghai comes despite the HSBC Chinese service sector PMI slipping to 53.5 in September from 54.1 in August.
Without much in the way of economic data from the UK or Europe, the focus is likely to be on the US Wednesday, where third quarter earnings start to get released. The main event of the day will be the release of the minutes of the September Federal Reserve policy meeting, although they won't be out until after the European close, at 1900 BST, which analysts suggest could lead to investor caution Wednesday.
The September meeting was surrounded by speculation that the US policy makers might remove the words "considerable time" from its forward guidance over how long rates will stay at current levels after its asset-buying programme ends this month. Investors will be keen to find out Wednesday how close that removal was.
"With quantitative easing set to end at the end of this month, tonight's minutes could well be instructive with respect to the Federal Reserve's thinking on the trajectory of monetary policy in the coming months," says chief market analyst at CMC Markets Michael Hewson.
From the UK corporate calendar Wednesday, FirstGroup has released a trading statement to say its first half trading has been in line with expectations, but that it has lost the ScotRail franchise. Pub operator Marston's also has put out a trading statement to say its full-year operations have been in line with expectations.
By Jon Darby; [email protected]; @jondarby100
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