(Correcting the attribution of the first quote.)
(Alliance News) - Stocks in London are set to tread water on Thursday, as cautious sentiment prevails amid fears of a slowdown in the US economy, and mounting geopolitical tensions.
IG says futures indicate the FTSE 100 index of large-caps to open up 18.0 points, 0.2% at 7,680.94 on Thursday. The FTSE 100 index closed up 28.42 points, or 0.4% at 7,662.94 on Wednesday.
Financial markets in the London, Paris, Frankfurt and New York will be closed on Friday to mark Good Friday. However, the US jobs report will still be reported at 1330 BST on Friday.
In the US on Wednesday, Wall Street ended mixed, with the Dow Jones Industrial Average ending up 0.2%, the S&P 500 down 0.3% and the Nasdaq Composite down 0.3%.
"Yesterday was a typical risk-off day in the financial markets. The US treasuries rallied, the yields fell, and the stocks fell as well, as the latest set of economic data from the US showed further weakness," said Swissquote Bank's Ipek Ozkardeskaya.
On Wednesday, survey data from the Institute for Supply Management indicated that the slowdown in the US services sector was faster than expected.
The ISM services PMI registered 51.2 in March, its third consecutive month of growth, but down from 55.1 points in February. Markets had expected the reading to dip to 54.5 points, according to FXStreet.
Meanwhile, in Asia on Thursday, the Nikkei 225 index in Tokyo closed down 1.1%. The S&P/ASX 200 in Sydney closed down 0.3%. In China, the Shanghai Composite was marginally lower, while the Hang Seng index in Hong Kong was marginally higher.
China's services sector continued to rebound in March, according to the latest survey data on Thursday.
The Caixin services purchasing managers' index rose to 57.8 points in March from 55.0 in February, rising further above the 50-point mark that separates expansion from contraction. It shows a sharp acceleration in the pace of growth.
It was the strongest expansion seen since November 2020, and the third consecutive month of growth.
However, sentiment was unsteady as geopolitical tensions between the world's two largest economies escalated. China sent warships through waters around Taiwan on Thursday as it vowed a "resolute response" to the island's president meeting US House Speaker Kevin McCarthy.
Taiwan leader Tsai Ing-wen held talks with McCarthy in Los Angeles on Wednesday, expressing gratitude afterwards for the meeting that she said showed her island was not isolated on the international stage. China had repeatedly warned both sides the meeting should not take place, and deployed an aircraft carrier through waters near Taiwan hours before the talks went ahead.
"These heightened global tensions do not provide the most favourable circumstances for traders. They already have a lot on their plates, such as persistently increased inflation in the United States and throughout the world, the aftermath of Covid, and the continued dangers to the financial system owing to higher rates, which Jamie Dimon, JPMorgan's CEO, said isn't over yet," said Naeem Aslam, Zaye Capital Markets.
"Moreover, rising oil prices threaten to undermine central banks' efforts," he added.
Brent oil was trading at USD84.56 a barrel early Thursday, up from USD84.48 late Wednesday. It was sharply from USD79.14 at the market close on Friday before the surprise production cut announcement from Opec+ over last weekend.
Gold was quoted at USD2,013.40 an ounce, lower than USD2,021.30, but also up sharply from USD1,979.05 last Friday.
"It is commonly assumed that the present surge in gold prices is mostly the result of speculators seeking a safe-haven asset class....But it is also vital to note that most of the yellow metal's rise is due to weakness in the dollar index, which is predicted to fall as the Fed eases off its ultra-hawkish monetary policy," Aslam continued.
The dollar was slightly stronger in early exchanges, but down from the highs of recent months.
Sterling was quoted at USD1.2445 early Thursday, lower than USD1.2471 at the London equities close on Wednesday. The euro traded at USD1.0902 down from USD1.0919. Against the yen, the dollar was quoted at JPY131.46, up versus JPY130.94.
In the economic calendar, there's a UK construction PMI print at 0930 BST. The US weekly unemployment insurance claims will be released at 1330 BST
By Elizabeth Winter, Alliance News senior markets reporter
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