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LONDON (Alliance News) - UK stocks are called to open slightly higher Friday, overturning some of the losses that were posted in the previous session, after a late rally on Wall Street saw US equities close firmly higher.
The FTSE 100 is expected to open around 12 points higher at 6,822, having closed at 6,810.6 on Thursday.
"We can expect to see a higher European open after a late rally in the US saw a strong finish helped by some good weekly jobless claims and some reported remarks made by Fed Chair Janet Yellen to Democratic lawmakers that the Fed saw no need to raise rates imminently," says Michael Hewson, chief market analyst at CMC Markets. "Though I?m not quite sure why this would be a surprise to anyone given the outcome of Wednesday?s FOMC meeting," he adds.
A late-session rally helped US stocks recover Thursday from the sell-off over the course of the two previous days. The DJIA closed up 1.3%, while both the NASDAQ Composite and S&P 500 closed up 1.0%.
Comments made by Yellen to a group of Senate Democrats at a private luncheon seemed to ease concerns about the outlook for interest rates in the US, which contributed to the significant pull-back on Wednesday. Positive sentiment was also generated by a report from the US Labor Department showing that initial jobless claims fell to a fourteen-year low in the week ended January 24.
In Asia, ahead of the UK stock market open, trading is mixed. The Nikkei in Tokyo closed up 0.4%, after the Ministry of Internal Affairs and Communications reported that consumer prices in Japan were up 2.4% year-on-year in December, topping expectations for 2.3% and coming in unchanged from November. Core CPI, which excludes the volatile costs of food, added 2.5%, which was fractionally below forecasts for 2.6% and down from 2.7% in the previous month.
The Shanghai Composite index, meanwhile, is currently down 1.6%, with the Hang Seng down 0.4%.
Still to come in the data calendar Friday, UK consumer credit and mortgage approvals data for December are released at 0930 GMT. The eurozone's unemployment rate for December is due at 1000 GMT, alongside the preliminary reading of consumer price inflation for the single currency area for January.
"January's 'flash' estimate of eurozone CPI is likely to show deflation accelerating, with the risk of an out-turn below consensus expectations of -0.5% after the weaker-than-expected German CPI yesterday," says Michael Sawicki, senior economist at Lloyds Bank.
In the afternoon, focus will shift to the preliminary reading of fourth quarter US gross domestic product, which is scheduled to be released at 1330 GMT. Economists' expectations are for an increase of 3.3% year-on-year in the fourth quarter, following the 5.0% growth recorded in the third quarter.
That said, "expectations for this afternoon?s reading have come down somewhat after this week?s really poor durable goods numbers and revisions, which could well see a disappointing number this afternoon," says CMC Markets' Hewson. "The recent drop in oil prices could also start to see some evidence of a manufacturing slowdown," he adds.
Investors will also be keeping a close eye on US personal consumption expenditure data, which is released at the same time. Later on, the Chicago purchasing managers' index for January is published at 1445 GMT, while the Reuters/Michigan consumer sentiment index for January is due shortly after at 1500 GMT.
In the forex market, ahead of the data, the pound trades at USD1.5062, EUR1.3296, CHF1.3933, and JPY177.461, while the euro trades at USD1.1322, CHF1.0473, and JPY133.422.
In corporate news, FTSE 100-listed BT Group has reaffirmed its outlook for the full year as it posted pretax profit ahead of analyst expectations in its third quarter. It posted a pretax profit of GBP694 million for quarter to end-December 2014, up from GBP617 million a year before, and ahead of consensus analyst expectations of GBP658 million, although revenue came in lower at GBP4.48 billion, down from GBP4.60 billion, just missing analyst expectations of GBP4.49 billion.
The company also said that it is making "good progress" on its due diligence in relation to the potential acquisition of EE Ltd and announced that it has agreed a 16 year recovery plan with the trustee of the BT Pension Scheme.
Meanwhile, blue-chip International Consolidated Airlines Group SA said Friday that Qatar Airways has acquired a 9.99% stake in the company.
"We're delighted to have Qatar Airways, one of the world's premier airlines, as a long term supportive shareholder. We will talk to them about what opportunities exist to work more closely together and further IAG's ambitions as the leading global airline group," said IAG Chief Executive Willie Walsh.
No financial details were given on the acquisition of the stake.
On the FTSE 250, automotive retail and services company Inchcape said it has appointed Stefan Bomhard as its new chief executive. Bomhard replaces André Lacroix, who left the company in September to become the chief executive of FTSE 100 testing company Intertek.
By James Kemp; jameskemp@alliancenews.com; @jamespkemp
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