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(Alliance News) - Stocks in London are set to open lower on Monday, as the latest data from China added to a gloomy global economic outlook.
IG says futures indicate the FTSE 100 to open down 12.1 points, 0.2%, at 7,244.84 on Monday. The index of London large-caps closed 23.56 points lower, or 0.3%, at 7,256.94 on Friday.
"With economic data continuing to look on the soft side and central banks showing little sign of easing up when it comes to interest rate rises there was little to cheer for markets in Europe, with concerns about weakness in the Chinese economy adding to the gloom," said CMC Markets' Michael Hewson.
Sterling was quoted at USD1.2808 early Monday, lower than USD1.2832 at the London equities close on Friday. The euro traded at USD1.0955, higher than USD1.0949. Against the yen, the dollar was quoted at JPY142.87, up versus JPY142.27.
Trading in Asia was mixed on Monday, as weak Chinese inflation data pointed to weak demand and a faltering economic recovery.
The consumer price index for June was down from the 0.2% seen in May, according to the National Bureau of Statistics, and was worse than expected as domestic demand slowed.
A 7.2% annual drop in the cost of pork, the staple meat in China, as well as falling oil prices that made transportation cheap, dragged down the cost of the essential goods basket, the NBS said.
Producer prices – which measure the cost of goods at the factory gate – tumbled 5.4% on-year, following a 4.6% slide in May. Economists polled by Bloomberg had expected prices to sink 5%.
The Nikkei 225 index in Tokyo was down 0.1%. In China, the Shanghai Composite was down 0.1%, while the Hang Seng index in Hong Kong was up 0.5%. The S&P/ASX 200 in Sydney was down 0.3%.
However, on a more positive note, there were conciliatory overtures between the world's two largest economies over the weekend.
US Treasury Secretary Janet Yellen on Sunday said her talks with top Chinese officials last week have helped put ties on "surer footing", as she wrapped up a trip aimed at stabilising fraught relations between the two countries.
Beijing's official Xinhua news agency said Saturday that Yellen's meeting with Vice Premier He Lifeng yielded an agreement to "strengthen communication and cooperation on addressing global challenges".
In the US on Friday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.6%, the S&P 500 down 0.3% and the Nasdaq Composite down 0.1%.
Gold was quoted at USD1,920.97 an ounce early Monday, lower than USD1,929.07 on Friday.
Brent oil fetched USD78.01 a barrel, higher than USD77.47.
In early UK company news, BT is on the hunt for a new chief executive, with Philip Jansen to step down next year, according to a Sky News report on Saturday.
Citing "city sources", Sky said the telecoms company has begun a formal search to replace Jansen, who took the helm in 2019. He is reportedly weighing various offers from across the Atlantic.
In the economic calendar on Monday, UK Chancellor Jeremy Hunt and Bank of England Governor Andrew Bailey speak at the yearly Mansion House event. US President Joe Biden will meet Rishi Sunak for their fifth meeting in recent months.
On Friday, earnings season kicks off with second-quarter results from banks JPMorgan, Wells Fargo, Citigroup as well as asset manager Blackrock.
"There is increasing nervousness that after such a good first half of the year, that the second half of the year is likely to be much more challenging," CMC's Hewson noted.
The local corporate calendar has quarterly numbers from self-storage firm Big Yellow Group on Monday.
By Elizabeth Winter, Alliance News senior markets reporter
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