13th Mar 2014 07:34
LONDON (Alliance News) - UK stocks are set to open marginally higher Thursday, after mixed sessions in Asia and despite more disappointing Chinese economic numbers.
Overnight Chinese data showed industrial production growth, retail sales growth, and urban investment growth all fell unexpectedly in January. However, despite the Chinese growth and credit concerns that saw global markets fall on Wednesday, the Chinese Shanghai Composite index is currently up 0.8%.
Chinese industrial production grew by 8.6% year-on-year in January, slowing from the 9.7% growth in December and missing economists expectations of 9.5% growth. "This drop isn?t altogether surprising, given reports about strikes and industrial unrest in Chinese factories in the past month," said CMC Markets chief market analyst Michael Hewson.
Similarly, retail sales in the world's second largest economy grew at a slower pace than expected, recording 11.8% growth year-on-year in January, down from the 13.6% growth recorded in December and missing economists expectations of 13.5%.
Urban investment in China grew by 17.9% year-on-year in January, also down from the previous month when investment grew by 19.6%. Economists had expected investment growth of 19.4%.
The disappointing data has kept the price of gold well supported, and the yellow metal had continued to push up overnight to a new recent high of USD1,374.89.
Also overnight, the growth of house prices in the UK slowed in February, according the latest survey from the Royal Institute of Chartered Surveyors, which posted a six-month low score of +45. That was well shy of forecasts for +52, which would have been unchanged from the January reading.
Despite the disappointing overnight data, spread betters are indicating that UK stocks will open marginally higher, with the FTSE 100 called to open up about 15 points at 6,635.
European inflation will be in focus over the morning, with French CPI data at 0745 GMT, and Italian CPI data at 0900 GMT, ahead of the European Central Bank monthly report, which is delivered at 0900 GMT.
At last week's policy meeting President Mario Draghi guided market expectations further away from expecting any form of near-term policy easing. "President Draghi?s speech today will be watched closely to see whether he takes a similar line to his comments at last week?s post policy meeting press conference," said Lloyds Bank senior international macroeconomist Rhys Herbert.
The focus will then shift to the US, where monthly retail sales are expected to have risen by 0.2% in February, which would signify a turnaround from the 0.4% decline recorded in January. US weekly initial jobless claims are released at the same time and are expected to show a small rise to 330,000, from 323,000 in the previous week.
"Uncertainty remains over whether the (US) economy?s weak start to the year is only down to the exceptionally cold winter or are other factors contributing. This is unlikely to be resolved for another month or more until we see data for March. In the meantime, today?s releases will continue to show a weather impact," said Herbert.
Later in the day, the US Senate is due to hold the confirmation hearings for the new appointees to the FOMC, including Vice-Chair Stanley Fisher, along with Lael Brainard and Jerome Powell.
In the UK corporate calendar Thursday, Morrison has already announced its full-year 2013 results which showed the supermarket swung into a GBP176 million pretax loss, from a GBP879 million profit 2012. Home Retail Group also has put out full-year numbers, along with Bwin.Party, F&C Asset Management and Salamander Energy.
By Jon Darby; [email protected]; @jondarby100
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