FTSE 100 to open lower on rate cut concerns

(Alliance News) - Stocks in London are set to open lower on Friday, following New York lower amid interest rate cut concerns.

IG says futures indicate the FTSE 100 to open down 62.7 points, 0.8%, at 8,276.53 on Friday. The index of London large-caps closed down 31.10 points, or 0.4%, at 8,339.23 on Thursday.

In the US on Thursday, Wall Street ended lower, with the Dow Jones Industrial Average down 1.5%, the S&P 500 down 0.7% and the Nasdaq Composite down 0.4%.

Risk sentiment across global equity markets suffers following stronger-than-expected US jobs and PMI data, which curbed hopes of interest rate cuts from the Federal Reserve.

The S&P Global flash composite purchasing managers' index shot-up to 54.4 points in May from April's final tally of 51.3.

The flash manufacturing PMI climbed to 50.9 points in May, from the 50.0 neutral mark it achieved in April. The May reading was a two-month-high. The services PMI surged to a one-year-high of 54.8 points in May from 51.3 in April.

The latest economic print from the world's largest economy comes amid growing concerns about its progress in tackling inflation.

According to minutes from the latest Federal Open Market Committee meeting on Wednesday, some members have even suggested that rates should rise.

In Tokyo on Friday, the Nikkei 225 index in Tokyo was down 1.1%.

The pace of Japanese inflation slowed in April as gas bills fell, government data showed, raising questions about when the Bank of Japan will hike interest rates again.

The consumer price index excluding volatile fresh food prices came in at 2.2%, compared with the 2.6% logged in March by the internal affairs ministry. The figure was in line with market expectations and comes even as the weak yen inflates prices for imported goods.

The data "probably reflects a move by companies to restrain price hikes in response to sluggish consumer demand", Taro Kimura from Bloomberg Economics said.

In China, the Shanghai Composite was down 0.4%, while the Hang Seng index in Hong Kong was down 1.5%. The S&P/ASX 200 in Sydney closed down 1.1%.

Sterling was quoted at USD1.2690 early Friday, lower than USD1.2710 at the London equities close on Thursday. The euro traded at USD1.0809 early Friday, lower than USD1.0830 late Thursday. Against the yen, the dollar was quoted at JPY157.06, down versus JPY157.13.

Gold was quoted at USD2,335.90 an ounce early Friday, lower than USD2,340.90 on Thursday. Brent oil was trading at USD81.28 a barrel early Friday, lower than USD81.58 late Thursday.

On Friday's UK corporate calendar, there is a trading statement from Intertek, a testing laboratories company, and full-year results from Volvere, a turnaround investment fund.

Meanwhile, the economic calendar has a UK retail sales reading at 0700 BST, before US durable goods orders at 1330 BST.

By Sophie Rose, Alliance News senior reporter

Comments and questions to [e-mail]

Copyright 2024 Alliance News Ltd. All Rights Reserved.