13th Jan 2015 07:37
LONDON (Alliance News) - London stocks are set to open lower Tuesday, with further falls in crude oil renewing concerns about the health of the global economy.
The FTSE 100 is called to open 19 points lower at 6,481.8. The index closed at 6,501.42, unchanged on the day.
Brent crude is quoted at a near six-year low of USD45.28 early Tuesday, down more than 60% from its summer high of USD115. US benchmark West Texas Intermediate was quoted at USD44.41, a level not seen since mid-March 2009.
"Another sharp decline in oil prices overnight weighed heavily on US energy stocks, while in Asia a better than expected trade balance update from China helped support stocks in the region," says Craig Erlam at Alpari.
The Dow Jones Industrial Average closed down 0.5% on Monday at 17,640.84, its second consecutive session-end in the red.
"Oil prices are largely dictating play in the financial markets with energy companies acting as a major drag on the markets despite the fact that people are generally in agreement that lower oil prices are actually a net positive for the global economy," Erlam adds.
China's trade surplus fell to USD49.6 billion in December from November's record high of USD54.48 billion. Economists had expected the trade surplus to decrease to USD49 billion. Exports grew 9.9% year-over-year in December, which was faster than the 6% rise expected by economists, helped by buoyant growth in the US. In November, exports had increased 4.7%.
Imports declined 2.3%, slower than the 6.2% drop forecast by economists. In November, imports had decreased 6.7%.
"We had expected the sharp falls in the price of oil and other commodities to have weighed more heavily on the value of imports, but it appears that this may have been partly offset by a pick-up in the volume of oil imports as China takes advantage of low prices to add to its strategic reserves," says Julian Evans-Pritchard, China Economist at Capital Economics.
UK consumer inflation figures and producer prices for December are due at 0930 GMT.
In UK corporate news, WM Morrison Supermarkets said Chief Executive Dalton Philips will step down after five years in charge following the retailer's full-year results. The supermarket operator said like-for-like sales fell 3.1% in the six weeks to January 4 while total sales excluding fuel fell 1.3%.
Department store operator Debenhams said like-for-like sales in the four weeks over Christmas rose 4.9% while online retailer ASOS reported a 15% rise in retail sales for the six-week period covering the season, bolstered by double-digit growth in the UK.
Pace said it expects its 2014 profits to be above its previous guidance, after revenue growth was particularly strong in the second half of the year thanks partly to new product launches and its acquisition of networks infrastructure company Aurora Networks. The company also said it had recorded "record" revenue in the fourth quarter of 2014, and expects revenue for the year as a whole to be USD2.61 billion and it is confident of making "further progress" in 2015 and beyond.
Japan's Nikkei closed down 0.6% at 17,087.71 after being closed for Coming of Age Day on Monday. The Hang Seng in Hong Kong is up 0.8% at 24,222.01, and the Shanghai Composite is up 0.2% at 3,235.301.
By Ian Edmondson; [email protected]
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