11th Apr 2014 06:31
LONDON (Alliance News) - UK stocks are set to open lower Friday following heavy falls on Wall Street, as concerns over high valuations of technology stocks spread into the bio-tech sector.
The Nasdaq Composite index had its worst day since 2011. While most of the major sectors came under pressure, biotechnology stocks posted particularly steep losses on the day. The NYSE Arca Biotechnology Index plummeted by 5.6%, offsetting yesterday's 3.8% gain and setting a new two-month closing low.
Following a volatile day of trading on Thursday that saw major UK shares finish close to flat, IG Index is indicating the FTSE 100 will open 0.6% lower at 6,596.00 points.
"Finally it appears that markets are looking past the froth of unrealistic valuations and starting to adopt a ?show me the money? approach, and this is likely to be reflected in a sharply lower open this morning in Europe," said CMC Markets chief market analyst Michael Hewson.
Asian stocks also had a down day Friday, with the Nikkei closing down 2.5%, while the Hang Seng is trading down 0.6%, and the Shanghei Composite is down 0.1%.
Chinese inflation data released overnight showed consumer prices growing slightly slower than expected, with a CPI reading of 2.4% year-on-year in March missing expectations for 2.5% growth. The figure was up from 2.0% in February.
Consumer prices in Europe's biggest economy have been confirmed as increasing at 1.0% year-on-year in March. The second reading of Germany's March CPI was unchanged, as was the monthly print of 0.3%. The harmonised index, which the European Central Bank likes to use for policy decisions was also confirmed at 0.9%, down from 1.0% in February.
In a quiet economic calendar Friday, Spanish CPI numbers at 0700 GMT may be of interest, as investors look to see how the Euopean economies are performing following Thursday's successful bond auction by Greece and with the possibility of further monetary stimulus from the ECB still looming.
In the afternoon, US PPI inflation numbers are out at 1230 GMT, followed by Reuters/Michigan consumer sentiment index at 1355 GMT.
The banks are likely to be in focus as the US big names begin to release their first quarter earnings, with JP Morgan due to report Friday.
Investors will also have one eye on any headlines coming from Washington, where the International Monetary Fund continues its spring Meeting with the World Bank.
A quiet UK corporate calendar has brought interim management statements from Jupiter Fund Management and XP Power.
By Jon Darby; [email protected]; @jondarby100
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