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(Alliance News) - Stock prices in London are seen opening slightly lower on Tuesday, giving back some of Monday's gains, though Asian equities bounced with investors optimistic that a US financial aid package will get over the line.
IG futures indicate the FTSE 100 index will open 10.0 points lower at 6,513.53. The index of London large-caps closed up 0.5%, or 34.20 points at 6,523.53 on Monday.
"Overnight, the Biden-stimulus vaccine powered global recovery rally continued unabated, with Wall Street hitting record highs, the US dollar falling, oil rising, and even gold finding a few long-lost friends. With no data of note to distract, the overnight price action looked very much a rinse repeat the Friday session sans the dollar weakness," OANDA Asia Pacific Senior Market Analyst Jeffrey Halley said.
On Wall Street on Monday, the Dow Jones Industrial Average closed up 0.8%, the S&P 500 up 0.7%, and the Nasdaq Composite up 1.0%.
"US futures are almost unchanged in Asia, meaning that the region was happy to hitch its wagon to Wall Street's momentum."
In Asia on Tuesday, Japan's Nikkei 225 closed up 0.4% at 29,505.93 on Tuesday, a 30-year high. The Shanghai Composite Index was up 1.9% in late trade, and the Hang Seng Index in Hong Kong was 0.3% higher.
Investors are betting that US President Joe Biden will succeed in enacting most aspects of his ambitious relief package, after the jobs report on Friday missed market forecasts.
The president's rescue plan would provide for stimulus checks, expanded unemployment benefits, and aid to small businesses, though it may get whittled down from its initial USD1.9 trillion price tag as it makes its way through Congress, where his Democratic party has a slim majority in both houses.
OANDA's Halley argued that only worse-than-expected US and Chinese inflation numbers can distract markets from stimulus positivity. Chinese inflation data are due at 0300 GMT on Wednesday, before US numbers at 1330 GMT.
"With most of Asia shutting down for Lunar New Year, starting with Taiwan and Vietnam tomorrow, liquidity will steadily erode in Asia, where trading appears muted already today. That will leave those markets that are still open, vulnerable to headline-driven, temporary volatility spikes," Halley added.
Financial markets in China are closed on Thursday and Friday.
The economic events calendar on Tuesday has Germany trade data at 0700 GMT.
AstraZeneca shares closed up 0.2% on Monday, but doubts were raised over its Covid-19 jab, developed alongside the University of Oxford.
The World Health Organization insisted Monday that the AstraZeneca vaccine was still a vital tool in the global fight against the coronavirus pandemic, after South Africa delayed the start of its inoculation programme over concerns about its efficacy against a virus variant.
A barrel of Brent oil was quoted at USD61.16 early Tuesday, rising further after breaching the USD60 mark on Monday. The North Sea was quoted at USD60.32 at the London equities close on Monday.
"Oil extended its recent gains yesterday as a combination of hopes for a US stimulus package combined with ongoing mild supply concerns supported prices," CMC Markets analyst David Madden commented.
Gold fetched USD1,839.42 an ounce, improved from USD1,836.80 at the London market close on Monday.
Elsewhere, dollar weakness continued early Tuesday. Sterling was quoted at USD1.3779, up from USD1.3740 at the London market close on Monday.
The euro was quoted at USD1.2080, improved from USD1.2050 at the European equities close Monday. Against the Japanese yen, the dollar fetched JPY104.84, down from JPY105.17 at the London market close on Monday.
"Looking forward, US dollar weakness should now continue this week, unless inflation in the US prints markedly higher tomorrow," OANDA's Halley added.
The UK corporate Tuesday has annual results from online grocer Ocado Group and from software firm Micro Focus International. Housebuilder Bellway will put out a trading statement.
By Eric Cunha; ericcunha@alliancenews.com;
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