(Alliance News) - Stocks in London are set to open slightly higher on Friday, after a mostly higher close on Wall Street, though following weak economic data for China.

IG says futures indicate the FTSE 100 to open up 22.3 points, 0.3%, at 7,493.99 on Friday. The index of London large-caps closed down 28.80 points, or 0.4%, at 7,471.69 on Thursday.

Strong US economic data out during London market hours on Thursday had eased recession fears and boosted hopes of a "soft landing" amid monetary tightening.

In New York, the Dow Jones Industrial Average closed up 0.8%, the S&P 500 up 0.5%, and the Nasdaq Composite flat.

US economic growth was revised upwards, while labour market data remained robust. The figures followed Wednesday's trio of good news when new housing sales, durable goods orders, and consumer confidence figures were all stronger-than-expected in the US.

Tech stocks struggled, with the stronger data potentially setting the stage for more interest rate hikes by the US Federal Reserve in the months to come, having paused the cycle this month.

"The surprising resilience of US economic data this week has made it an absolute certainty that we will see another rate increase in July, but also raised the possibility that we might see another 2 more rate increases after that," said CMC Markets' Michael Hewson.

The dollar was mixed in early exchanges in Europe.

Sterling was quoted at USD1.2635 early Friday, higher than USD1.2611 at the London equities close on Thursday.

The euro traded at USD1.0875, lower than USD1.0886. Against the yen, the dollar was quoted at JPY144.67, unchanged from JPY144.70.

In Asia on Friday, the Nikkei 225 index in Tokyo was down 0.3%. The S&P/ASX 200 in Sydney was up 0.1%.

In China, the Shanghai Composite was up 0.9%, while the Hang Seng index in Hong Kong was up 0.2%.

Activity in China's factory sector contracted for a third straight month in June, official data showed on Friday, signalling a patchy recovery in the world's number two economy as global demand and raw material prices slumped.

The official manufacturing purchasing managers' index came in at 49.0 points, below the 50-point mark that separates expansion and contraction, according to the National Bureau of Statistics.

However, it was above the 48.8 figure recorded in May and in line with forecasts by economists polled by Bloomberg.

The official non-manufacturing PMI, which measures business sentiment in the services and construction sectors, fell to 53.2 in June from 54.5 in May - indicating growth is slowing in these sectors.

"Nothing seems to be boosting the Chinese recovery because consumer and investor confidence have been severely damaged as a result of government crackdowns and Covid," said Swissquote Bank senior analyst Ipek Ozkardeskaya.

Gold was quoted at USD1,909.70 an ounce early Friday in London, lower than USD1,911.17 late on Thursday.

Brent oil was trading at USD74.49 a barrel, higher than USD73.70.

The local corporate calendar has a trading statement from currency and asset manager Record.

Pendragon holds its annual general meeting. According to a Sky News report late Thursday, the automotive retailer's chair, Ian Filby, will step down after less than two years in the role.

This comes amid growing pressure from an activist investor, Palliser, which has called for a boardroom shake-up, according to Sky News. An announcement is expected as early as Friday.

Friday's economic calendar has a UK gross domestic product reading for the first quarter at 0700 BST, before a flash eurozone inflation reading for June at 1000 BST.

At 1330 BST, there will be the US core personal consumption expenditures price index, which is the Federal Reserve's preferred measure of inflation.

By Elizabeth Winter, Alliance News senior markets reporter

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