Stocks called lower as rate cut hopes ease

May 23, 2024 at 01:46 am

(Alliance News) - Stocks in London are set to open higher on Thursday, following a lower close on Wall Street after hawkish US central bank minutes.

IG says futures indicate the FTSE 100 to open up 14.8 points, 0.2%, at 8,385.13 on Thursday. The index of London large-caps closed down 46.12 points, 0.6%, at 8,370.33 on Wednesday.

Rishi Sunak has called a general election for July 4, saying it was "the moment for Britain to choose its future".

The prime minister has gambled that improved inflation figures and a recovering economy will help him overturn Labour's 20-point opinion poll lead.

The UK consumer price index rose by 2.3% in April from a year before, slowing from a 3.2% annual increase in March, according to the Office for National Statistics.

Though inflation was hotter than market consensus of 2.1%, which would have been only a hair above the Bank of England's 2% target, the latest figure still is the coolest rate of inflation since July 2021.

A July election is earlier than many in Westminster had expected, with a contest in October or November widely thought to have been more likely.

Over in the US on Wednesday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.5%, the S&P 500 down 0.3% and the Nasdaq Composite down 0.2%.

Federal Reserve officials grew more concerned about the lack of progress in tackling inflation, minutes from the latest Federal Open Market Committee meeting showed, with some members even suggesting rates should rise.

"Various participants mentioned a willingness to tighten policy further should risks to inflation materialize in a way that such an action became appropriate," the minutes showed.

Officials noted a "lack of further progress" towards the central bank's 2% inflation target with recent monthly data showing "significant increases in components of both goods and services price inflation."

Sterling was quoted at USD1.2725 early Thursday, lower than USD1.2732 at the London equities close on Wednesday.

The euro traded at USD1.0827 early Thursday, lower than USD1.0840 late Wednesday. Against the yen, the dollar was quoted at JPY156.73, up versus JPY156.55.

In Asia on Thursday, the Nikkei 225 index in Tokyo was up 1.2%. In China, the Shanghai Composite was down 1.2%, while the Hang Seng index in Hong Kong was down 1.7%. The S&P/ASX 200 in Sydney closed down 0.5%.

Gold was quoted at USD2,370.60 an ounce early Thursday, lower than USD2,389.20 on Wednesday.

Brent oil was trading at USD81.38 a barrel early Thursday, lower than USD82.21 late Wednesday.

In Thursday's UK corporate calendar, there is a trading statement from Aviva. There are also full year results due out from National Grid.

The economic calendar for Thursday has a slew of composite PMI data from the eurozone, Germany, and the UK. There is also the weekly initial jobless claims data from the US.

By Sophie Rose, Alliance News reporter

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