25th Nov 2013 13:26
LONDON (Alliance News) - Futures markets are indicating a higher start to trading on Wall Street, as investor sentiment towards stocks receives a boost from the deal between world powers and Iran over the country's nuclear capabilities.
The deal made in Geneva requires Iran to allow some facility inspections and give up some previously enriched uranium, as well as freezing construction on a plutonium reactor. In return, at least USD7 billion in economic sanctions against the country will be lifted.
The news has sent stocks higher across the globe. In London the FTSE 100 is currently trading up 0.3% at 6,692.89 while in Frankfurt the DAX is up 0.9%.
On Friday the Dow Jones Industrial Average reached another all-time high, and the S&P500 closed above 1,800 for the first time ever. US futures indicate Monday's positive sentiment will mean an even higher start to equities trading in New York. Spread betters are indicating the DJIA, S&P500 and the Nasdaq Composite all to open about 0.3% higher.
"U.S futures are again in positive mood, with an Iranian nuclear deal providing the fuel to keep the rally on track", said CMC Markets Senior Trader Toby Morris.
The Iran deal and it's effect on the price of oil has been the major driver of the day for UK equities. The price of Brent oil, which was trading at about a 6-week high on Friday, dropped sharply on announcement of the deal, to a low of USD108.03 per barrel as the market factored in a lower risk of Middle Eastern supply disruption.
The lower oil price has sent airline stocks soaring. International Consolidated Airlines, up 2.8%, leads the gains on the FTSE 100, with easyJet also up 1.6%. The whole Travel & Leisure sector is up 1.5%, the fastest gaining equity sector, on the back of the oil price. Oil & Gas producers continue to fare worse, the sector index down 0.2%.
In a very light day for macro data, forex movements are muted but the dollar has been generally grinding higher across the board. Currently, the pound buys USD1.6195, the euro buys USD1.3520 and against the Japanese yen, the dollar trades at JPY101.80.
The afternoon data calendar brings US pending home sales data at 1500 GMT, followed by the Dallas Fed Manufacturing Business Index at 1530 GMT. The previous reading for the Index was 3.6.
The biggest numbers in the US data calendar this week will be the weekly jobless claims on Wednesday, which will more-or-less be the end of a short trading week in the US. On Thursday the New York markets are closed for Thanksgiving, with just a half day of trading to follow on Friday.
By Jon Darby; [email protected]; @jondarby100
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