(Alliance News) - Stocks in London are called to open a touch higher on Wednesday, with focus on US factory gate inflation and the UK budget announcement at midday.
IG says futures indicate the FTSE 100 index of large-caps to open 6.1 points, 0.1%, higher at 7,643.21 on Wednesday. The blue-chip index closed up 88.48 points, or 1.2% at 7,637.11 on Tuesday.
Shares in Asia on Wednesday, much like European stocks on Tuesday, recovered some losses from the Silicon Valley Bank-induced sell-off.
In Tokyo, the Nikkei 225 ended slightly higher, while the S&P/ASX 200 in Sydney climbed 0.9%. In China, the Shanghai Composite was up 0.6% in afternoon trade, while in Hong Kong, the Hang Seng index surged 1.5%.
In New York on Tuesday, the Dow Jones Industrial Average closed up 1.1%, the S&P 500 up 1.7% and the Nasdaq Composite up 2.1%.
While SVB-related concerns have not disappeared completely, there is a less risk-off mood in markets.
"Investors and traders are feeling more at ease today after the US financial industry recovered yesterday as a result of guarantees from US politicians. There is no question that politicians have been kept on their toes since SVB's demise, but the good news is that, unlike during the financial crisis, they have responded quickly to offer appropriate assistance to the industry, which has helped to alleviate some of the fears. Indeed, only part of the problems have been addressed, but this does not imply that traders and investors should start walking about blindfolded," Zaye Capital Markets analyst Naeem Aslam commented.
Also lifting the market mood on Wednesday was a report showing Chinese retail sales rebounded in January and February. This came after Beijing abandoned its suffocating zero-Covid policy, reopening borders and ending mandatory quarantine, and as the country celebrated the Lunar New Year holiday.
The 3.5% growth, released by the National Bureau of Statistics, came in line with expectations and was much better than the 1.8% drop suffered in December, indicating the world's number two economy was picking up after years of painful restrictions.
And with Beijing this week announcing it will resume issuing tourist visas, there is a hope for a further improvement this year.
Still to come on Wednesday is a US producer price index report at around 1230 GMT, with the UK budget statement expected around the same time.
Annual US producer price growth is expected to slow to 5.4% for February, according to consensus cited by FXStreet, from 6.0% in January.
Figures on Tuesday showed growth in the US consumer price index slowed to 6.0% last month from 6.4% in January.
UK Chancellor Jeremy Hunt is set to use a "budget for growth" to boost efforts to get people back to work, with a major expansion of childcare support set to form a key part of the package.
Announcements too on energy bill support, benefits reform and pensions allowances are all expected to form part of the budget when Hunt addresses MPs on Wednesday afternoon, even if he is expected to resist calls from Conservative backbenchers to go further on tax cuts.
Hunt is expected on Wednesday to reference the "difficult decisions" taken last November to stabilise the markets, following the short-lived premiership of Liz Truss, as he pitches a plan the government hopes can deliver "sustainable" growth.
Lower-than-expected UK government borrowing figures and a recent drop in wholesale energy prices has created some good news for the Treasury on the public finances, but the chancellor is still likely to proceed with caution and avoid any spending largesse.
Ahead of the announcement, the pound was largely unmoved. Sterling bought USD1.2154 early Wednesday, versus USD1.2150 at the London equities close on Tuesday. The euro rose to USD1.0735 from USD1.0719. The dollar rose to JPY134.74 from JPY134.45.
An ounce of gold faded to USD1,900.03 from USD1,903.01. A barrel of Brent traded at USD78.34, down from USD79.36.
In Wednesday's UK corporate calendar, there are full-year results from Prudential, Balfour Beatty, Ferrexpo and Trainline.
By Eric Cunha, Alliance News news editor
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