(Alliance News) - Stocks in London are set to open edge into the green on Tuesday, with investors weighing weak PMI data from China against a strong close on Wall Street.
IG says futures indicate the FTSE 100 to open up 6.7 points, 0.1%, at 7,334.09 on Tuesday. The index of London large-caps closed up 36.11 points, 0.5%, at 7,327.39 on Monday.
"European markets managed to get off to a positive start to the week yesterday, helped in no small part by the limited and incremental nature of the Israeli incursions into Gaza which appears to be helping assuage concerns that the escalations might prompt another front opening on Israel's northern border with Lebanon and Hezbollah," said CMC Markets' Michael Hewson.
The week's central bank decisions began on Tuesday, as the Bank of Japan announced a minor tweak to its unconventional policy of controlling government bond yields on Tuesday, stopping short of expectations and sending the yen lower.
Against the yen, the dollar was quoted at JPY150.24 early Thursday, up from versus JPY149.13 late Monday.
The BoJ has stuck with sub-zero borrowing costs to support the world's number three economy. Instead, it has sought to keep interest rates at ultra-low levels by buying up huge quantities of government bonds in an attempt to keep a lid on yields.
A media report on Tuesday said officials might widen this as they see inflation rising and the yen tumble against the dollar but the BoJ said only that it "will conduct yield curve control with the upper bounds of 1.0% for those yields as a reference".
In Asia on Tuesday, the Nikkei 225 index in Tokyo closed up 0.5%.
Meanwhile, the US Federal Reserve begins its two-day monetary policy meeting, with the market widely expecting there to be no interest rate hike announced on Wednesday.
"The Fed members will still be raising their eyebrows given the strength of the recent economic data, the uptick in inflation and global uncertainty. But they won't necessarily be raising the rates. Therefore, what they will say they will do will matter more for the market pricing than what they will do," said Swissquote Bank senior analyst Ipek Ozkardeskaya.
Sterling was quoted at USD1.2151 early Tuesday, higher than USD1.2144 at the London equities close on Monday. The euro traded at USD1.0608, little changed from USD1.0607.
In China, the Shanghai Composite was down 0.1%, while the Hang Seng index in Hong Kong was down 1.5%. China's factory activity fell back into contraction in October, official data showed, despite Beijing announcing a raft of policies aimed at shoring up the creaking economy.
The official manufacturing purchasing managers' index – a key measure of factory output – stood at 49.5 in October, below the 50-point mark separating expansion from contraction, the National Bureau of Statistics said. The reading came after the index edged up to 50.2 in September, having shrunk for five consecutive months.
The S&P/ASX 200 in Sydney closed up 0.1%.
In the US on Monday, Wall Street ended higher, with the Dow Jones Industrial Average 1.6%, the S&P 500 up 1.2% and the Nasdaq Composite up 1.2%.
Gold was quoted at USD1,993.32 an ounce early Tuesday, lower than USD2,000.32 on Monday. Brent oil was trading at USD88.10 a barrel, down from USD88.31.
In Tuesday's UK corporate calendar, oil major BP reports third quarter results.
Tuesday's global economic calendar sees a eurozone gross domestic product reading and flash consumer price index data at 1000 GMT.
By Elizabeth Winter, Alliance News senior markets reporter
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