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(Alliance News) - Stock prices in London are seen opening higher on Friday, with sentiment lifted by US President Joe Biden sizeable spending plans.
The New York Times on Thursday reported Biden will propose a USD6 trillion budget that would take the US to its highest sustained levels of federal spending since World War II.
Treasury Secretary Janet Yellen told lawmakers on Thursday that though the upcoming spending plan will push US national debt higher, it would not be beyond the country's means.
In early corporate news in London, AstraZeneca said it has gained European Commission backing for a lung cancer drug, and Irn-Bru maker AG Barr said it is "encouraged" by current trading as UK lockdown measures ease.
IG futures indicate the FTSE 100 index is to open 29.2 points higher at 7,048.87. The blue-chip index closed down 7.26 points, or 0.1%, at 7,019.67 on Friday.
In Asia on Friday, the Shanghai Composite was down 0.7%, as sentiment soured in late trade.
Australia on Friday moved ahead with a World Trade Organization case against Chinese tariffs on barley imports, as strains between the two countries showed little sign of abating.
The Hang Seng in Hong Kong was down 0.1%, with sentiment there also being dented in the afternoon. The Nikkei 225 in Tokyo clung onto strong earlier gains, closing up 2.2%. The S&P/ASX 200 ended 1.2% higher.
Biden on Thursday urged "generational" investment in US infrastructure to keep the economic superpower ahead of China while ensuring that less wealthy Americans are not left behind. Speaking at a community college in Cleveland, Ohio, Biden said his USD1.7 trillion American Jobs Plan is an opportunity to capitalize on the rapid US recovery from the Covid-19 shutdown.
"We're at an inflection point," he said. "We have a chance to seize the economic momentum...and this time we're going to deal everyone in, everyone who's been left out."
Analysts at ING commented: "Biden will propose a sizeable spending plan over the next few years which, although largely aspirational, could give a glimpse into directives to bolster growth for the US and in turn the global economy. Investors will await the release of the US fiscal plan while also looking to personal spending and sentiment reports for more direction."
US personal consumption expenditure figures for April are released at 1330 BST. Elsewhere, the economic events calendar on Friday has France inflation readings at 0745 BST and eurozone consumer confidence at 1000 BST.
Data already out showed import prices in Germany surged 10% yearly and 1.4% monthly in April.
The April figure was the highest annual change since December 2010, Destatis said. In March, the annual hike was 6.9%.
Export prices were 3.3% higher annually in April, compared to March's 2.2% growth.
Destatis noted energy import prices more than doubled.
"This high rate of annual change derives from the very low prices in April 2020. This increase is due to the extremely low price level of the comparative month (base effect). In April 2020, demand had reached its lowest point, caused by the corona crisis, with a strong surplus of supply at the same time," Destatis explained.
Sterling was quoted at USD1.4188 early Friday in London, up from USD1.4181 late Thursday. The euro stood at USD1.2180, down from USD1.2200 at the European equities close on Thursday.
Against the yen, the dollar was trading at JPY109.86, improved from JPY109.71.
In the UK, cases of the Indian variant have doubled in a week, leading to new concerns over the ending of Covid-19 restrictions in England next month.
UK Prime Minister Boris Johnson warned that freedom from restrictions on June 21 may have to wait as it emerged three-quarters of new cases are now the Indian mutation.
Ministers are remaining cautious on the prospect of all measures being scrapped in England on June 21, as set out in the prime minister's road map, although hospital admissions remain flat. Officials are examining the data after confirmed cases of the Indian variant of Covid-19 reached almost 7,000.
In early UK company news, AstraZeneca said its Tagrisso drug received EU backing as an adjuvant treatment for adults with early-stage, epidermal growth factor receptor-mutated non-small cell lung cancer.
An adjuvant therapy is designed to enhance the activity of another treatment. Epidermal growth factor receptor are proteins involved in cell division, when they are mutated it could lead to higher amounts of the protein being produced, potentially enhancing cancer cell growth.
Tagrisso "demonstrated a statistically significant and clinically meaningful improvement in disease-free survival", Astra said.
AG Barr on Friday said trading so far this year has been in line with board expectations.
"Despite lockdown restrictions being in place across much of the first quarter, Barr Soft Drinks trading has been relatively strong since the start of the new financial year. As lockdown restrictions have eased we have seen a positive impact on both our sales volume and mix, with a shift back towards 'drink now', hospitality and leisure," the company said.
"While the pace and extent of the reopening of the hospitality sector varies by region, our Funkin business is already beginning to see the benefits, delivering on-trade sales that provide optimism for the sector's recovery."
Funkin is the company's cocktails business. It saw a strong performance in the "take-home" channel in 2020, and AG Barr said that momentum has continued this year with more UK consumers enjoying cocktails from the comfort of their own home.
"Current trading is encouraging, and we have clear plans to further invest in our brands, with exciting consumer engagement and marketing activity planned across the year," AG Barr added.
The company also plans to recommence dividends. It will report on payout plans during a half-year trading update in August.
London's IPO market has been busy so far this year, with Darktrace and Deliveroo among those to debut in 2021.
On Friday, oxygen-equipment developer Belluscura said it raised GBP17.5 million in its AIM float. The company, an investee of Tekcapital, will have a GBP51 million market capitalisation on admission on Friday.
Belluscura earlier in May said IPO funds would be used to improve marketing, research new products and help secure US Food & Drug Administration approvals.
Brent oil was trading at USD69.28 a barrel early Friday in London, up from USD68.93 late Thursday. An ounce of gold fetched USD1,890.21, down slightly from USD1,891.30.
By Eric Cunha; ericcunha@alliancenews.com;
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