8th Jun 2023 06:59
(Alliance News) - Stocks in London are set to open flat on Thursday, as tepid equities trade continues amid fears of further interest rate hikes.
IG says futures indicate the FTSE 100 to open down 1.0 point at 7,623.34 on Thursday. The index of London large-caps closed down 3.76 points at 7,624.34 on Tuesday.
Risk appetite was damped on Wednesday as a slump in Chinese exports caused concern about a global economic slowdown, and another central bank enacted a surprise interest rate.
The Bank of Canada defied expectations on Wednesday and lifted its benchmark rate, following in the footsteps of the Reserve Bank of Australia earlier this week.
"With the prospect of more interest rate rises on the way yields pushed higher, which in turn acted as a drag on equity markets more broadly, even as US markets finished the session mixed," said CMC Markets' Michael Hewson.
In New York on Wednesday, the Dow Jones Industrial Average closed up 0.3%, but the S&P 500 index down 0.4% and the Nasdaq Composite down 1.3%.
UK Prime Minister Rishi Sunak on Wednesday announced his plans for the UK to hold a world-first summit on artificial intelligence, seeking a leading role for Britain in limiting potential doomsday risks as he visited Washington. Sunak will meet US President Joe Biden at the White House on Thursday.
Sterling was quoted at USD1.2460 early Thursday in London, little changed from USD1.2459 at the London equities close on Wednesday. The euro traded at USD1.0716, higher than USD1.0705. Against the yen, the dollar was quoted at JPY139.74, down from JPY139.85.
In Asia on Thursday, the Nikkei 225 index in Tokyo was down 1.2%.
Japan's economy expanded 0.7% in the January-March quarter, improved from an initial estimate of 0.4%, government data showed. The latest figure – which also beat market expectations of 0.5% growth – reflects strong corporate investments, data released by the Cabinet Office showed. The first-quarter number was much stronger than the 0.1% seen in the final quarter of 2022.
In China, the Shanghai Composite was up 0.7%, while the Hang Seng index in Hong Kong was up 0.4%. The S&P/ASX 200 in Sydney was down 0.3%.
Gold was quoted at USD1,946.89 an ounce early Thursday, lower than USD1,954.11 on Wednesday. Brent oil was trading at USD76.85 a barrel, lower than USD77.24.
In Thursday's UK corporate calendar, there are full-year results from Wizz Air and half-year results from Crest Nicholson.
The economic calendar has EU GDP at 1000 BST and the US weekly unemployment insurance claims at 1330 BST.
By Elizabeth Winter, Alliance News senior markets reporter
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