17th Mar 2015 07:43
LONDON (Alliance News) - UK stocks are set to open flat Tuesday after a strong rally in stocks across Europe and on Wall Street on Monday.
IG indicates the FTSE 100 to open flat at 6,805.0. The index closed up 0.9% at 6,804.08 on Monday despite a heavy fall in oil prices.
US benchmark West Texas Intermediate dropped to a fresh six-year low on Monday amid rising stocks and hopes for a nuclear deal with Iran, which is expected to boost output if Western sanctions are lifted.
WTI fell to a low of USD42.83 a barrel, its lowest since March 2009, while Brent oil declined to a low of USD52.64 a barrel, its lowest since the beginning of February.
Ahead of the open Tuesday, oil has seen a modest recovery. Brent trades at USD53.94 a barrel, and WTI is at USD43.75 a barrel.
"The continued weakness in oil prices served to help equity markets, given the continued downward pressure it places on inflation pressures, while weak US data also helped, ahead of the start of today's two-day [US Federal Reserve] meeting," says Michael Hewson, chief market analyst at CMC Markets.
Data from the Federal Reserve on Monday showed that industrial production in the US grew by less than expected in February. The report said industrial production inched up by 0.1% in February following a revised 0.3% decrease in January. Economists had expected production to rise by 0.3% compared to the 0.2% increase originally reported for the previous month.
Wall Street made broad gains Monday, with the DJIA closing up 1.3%, the S&P 500 ending up 1.4%, and the Nasdaq Composite rising 1.2%.
In Asia Tuesday, the Japanese Nikkei closed up 1.0%.
The Bank of Japan kept its massive stimulus unchanged and cautioned that inflation may slow to about zero percent. In a statement, the BoJ announced that the policy board headed by Governor Haruhiko Kuroda decided by an 8-1 majority vote to maintain the size of quantitative and qualitative easing. The bank will continue to raise the monetary base at an annual pace of about JPY80 trillion.
The Hang Seng trades down 0.2% Tuesday, and the Shanghai Composite is up 1.6%.
Among early UK company news, Antofagasta reported lower 2014 earnings, as expected, as revenue was hit by a drop in copper prices, and it cautioned that copper prices are set to remain volatile this year and it's keeping its dividend policy under review while it tries to resolve issues at the Los Pelambres mine in Chile.
The FTSE 100-listed miner reported a pretax profit of USD1.57 billion for 2014, down from USD2.08 billion in 2013, as revenue declined to USD5.29 billion, from USD5.97 billion, largely on the back of an 8.5% decline in realised copper prices as well as a small decline in sales volumes.
Sky said it has invested a further USD5 million in start-up internet TV company 1Mainstream, continuing a string of investments the British pay-TV operator has been making in companies it hopes are developing the technologies of the future.
J Sainsbury reported a drop in sales in the fourth quarter of its financial year, despite price reductions and a volume increase across the business. The supermarket chain said total retail sales were down 0.3% excluding fuel in the 10 weeks to March 14, and down 2.7% including fuel. Like-for-like sales were down 1.9% excluding fuel, and down 3.9% including fuel for the fourth quarter.
Financial spread betting firm IG Group released a third quarter trading statement, and online takeaway company Just Eat reported full-year results.
In the economic calendar, eurozone consumer price index is due at 1000 GMT, as are ZEW survey results for both the eurozone and Germany.
By Neil Thakrar; [email protected]; @NeilThakrar1
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