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LONDON (Alliance News) - Stocks in London on Tuesday are seen pulling back slightly from Monday's strong start to the week, with third-quarter earnings from oil major BP and Cillit Bang stain-remover maker Reckitt Benckiser due ahead of the open.
IG says futures indicate the FTSE 100 index of large-caps to open 8.02 points lower at 7,018.30 on Tuesday. The FTSE 100 index closed up 1.3%, or 86.76 points at 7,026.32 on Monday.
The pound remained sub-USD1.28 early Tuesday, quoted at USD1.2796 compared to USD1.2793 late Monday which, in turn, was down from USD1.2827 late Friday, as the latest UK budget failed to enthuse currency traders.
UK Chancellor Philip Hammond on Monday pledged a GBP20.5 billion post-inflation increase for the National Health Service over the next five years as well as unveiling early increases in tax-free personal allowances.
In all, the measures announced in Hammond's third Budget amounted to a GBP100 billion loosening of the purse-strings over a six-year period.
"This budget being dependent on a Brexit deal is what prevented investors from getting giddy at the prospect of more spending and the pound rallying. With no Brexit deal done and talks in deadlock, doubts exist as to whether the largest giveaway in 8 years will ever actually materialise," said Jasper Lawler, head of research at London Capital Group.
The Office for Budget Responsibility warned about this on Monday. A disorderly Brexit "could have severe short-term implications for the economy, the exchange rate, asset prices and the public finances", cautioned the government's independent forecaster.
In the US on Monday, Wall Street ended lower, with the Dow Jones Industrial Average shedding 1.0%, the S&P 500 down 0.7% and Nasdaq Composite off 1.6%.
In Asia on Tuesday, the Japanese Nikkei 225 index closed up 1.5%. In China, the Shanghai Composite is up 1.4%, while the Hang Seng index in Hong Kong is down 0.5%.
In Japanese economic data, the unemployment rate declined in September, the Ministry of Internal Affairs and Communications reported. The jobless rate fell to 2.3% from 2.4% in August. This was the lowest rate since early 1990s. The rate was expected to remain unchanged at 2.4%.
The unemployment rate is the lowest it has been in a generation and it will fall further over the coming year, Marcel Thieliant, an economist at Capital Economics, noted. The upshot is that wage growth probably won't reach the 2.5% annual rate required to meet the BoJ's 2% inflation target, the economist added.
To come in the economic events calendar on Tuesday are German unemployment figures at 0855 GMT, eurozone third quarter GDP at 1000 GMT, and German inflation readings at 1300 GMT.
