LONDON (Alliance News) - Stock prices in London are seen opening higher on Thursday, continuing gains made on Wednesday, as a falling pound helps overseas exposed stocks and a surge in commodity prices boosted miners.
Investors on Thursday will be looking to UK retail sales data at 0930 BST, with a number of retailers reporting difficulties so far in 2018.
IG futures indicate the FTSE 100 index is to open 10.50 points higher at 7320.20. The blue chip index closed up 1.3%, or 91.29 points, at 7,317.34 on Wednesday.
The large cap index hit an intraday high of 7,325.59 in afternoon trade on Wednesday - its highest level since late February.
"European bourses are pointing to a positive start at the open, despite a mixed finish on Wall Street from a lacklustre session," said Jasper Lawler, Head of Research at London Capital Group.
"Whilst the S&P and the Nasdaq rose for a third straight session, the Dow closed 38 points lower dragged down by IBM, which tumbled over 7%. IBM posted better than expected results, however they were attributed to a one-off tax gain."
"The broader US market and trading in Asia overnight have been supported by a rally in commodities. Crude oil charged over 3.5% higher in the previous session, hitting a fresh 3 and a half year high after oil inventories dwindled and concerns of supply disruptions lingered," he added.
"Traders are starting to get excited that the oil market is finally rebalancing with the global supply glut evaporating. Whilst it may be premature for the OPEC led group implementing supply cuts to cheer, the numbers are certainly pointing to a potential end in sight."
Brent oil was quoted at USD73.89 a barrel early Thursday, compared to USD72.78 at the London close Wednesday.
The North Sea benchmark hit its highest level since November 2014 of USD73.37 in afternoon trade after the energy information administration reported that US crude inventories declined by 1.1 million barrels last week.
In the US on Wednesday, Wall Street ended mixed, with the Dow Jones Industrial Average down 0.2%, the S&P 500 up 0.1%, and Nasdaq Composite ending up 0.2%.
The pound was down quoted at USD1.4201 early Thursday compared to USD1.4215 at the London equities close on Wednesday. This was down on the USD1.4303 at the close on Tuesday, after a sharp deterioration in the UK inflation readings for March.
"Overnight the pound closed 0.6% lower versus the dollar, just managing to keep its head above USD1.42 following a slide in inflation, which is causing traders a reassess the probability of a Spring rate hike by the BoE," said Lawler.
"This morning the pound remains at USD1.42 as investors look cautiously ahead to UK retail sales figures. Retail sales are expected to have increased 1.4% year on year in March, up from 1% in February. After weaker than expected wage growth and inflation could we see a hattrick of disappointment for the pound?"
In overnight UK corporate news, miner BHP Billiton reduced full year iron ore production forecasts and narrowed copper production guidance as it continues to progress on its exit from its US onshore petroleum business.
For the nine months ended March, iron ore production rose 2% to 175 million tonnes. Copper production increased 37% to 1.3 million tonnes.
Petroleum production fell 8% to 143 million barrel of oil equivalent. In coal, mettalurgical coal production fell 2% to 31 million tonnes and energy coal production to 20 million tonnes.
BHP reduced its iron ore guidance to between 272.0 million tonnes and 274.0 million tonnes, from between 275 and 280 million tonnes in February. This was after car dumper issues reduced production.
In financial 2017, iron ore production stood at 231.0 tonnes generating USD14.62 billion in revenue.
Copper production guidance was narrowed to between 1.7 million and 1.8 million tonnes. In financial 2017, copper production stood at 1.3 million tonnes generating USD8.34 billion in revenue. Guidance provided in February suggested production between 1.7 million and 1.8 million tonnes.
BHP did reduce, however, copper production guidance from its Olympic Dam project to 135,000 tonnes. This was after a planned ramp-up in production after a major smelter campaign was slower than expected.
Guidance figures for petroleum and metallurgical and energy coal production remained the same. In financial 2017, petroleum production stood at 208.0 million barrels of oil equivalent generating USD6.87 billion in revenue. For metallurgical coal, production stood at 40.0 million tonnes and energy coal at 29.0 million tonnes generating a combined revenue of USD7.58 billion.
The UK corporate calendar on Friday has first quarter results from consumer goods giant Unilever, pest control company Rentokil Initial and gold miner Acacia Mining and third quarter results from pay-TV operator Sky. There are also half year results from department store chain Debenhams.
In UK political news, a fresh Commons showdown over Brexit is looming after the Lords inflicted a double defeat on the UK government.
New problems for Prime Minister Theresa May were signalled when an alliance of opposition peers, crossbenchers and Tory rebels backed seeking to retain the option of a customs union with the EU.
A second setback for the government over the EU (Withdrawal) Bill saw peers support measures ensuring that existing protections across a range of areas including employment, equality, health and safety and consumer standards cannot be changed except by primary legislation.
The Japanese Nikkei 225 index is up 0.3% early Thursday. In China, the Shanghai Composite is up 1.0%, while the Hang Seng index in Hong Kong is up 1.4%.
President Donald Trump Wednesday said the United States would rejoin the Trans-Pacific Partnership only if given the right offer.
"I don't want to go back into TPP, but if they offered us a deal I can't refuse on behalf of the US, I would do it," Trump said Wednesday at a press conference at his Mar-a-Lago resort in Florida with Japanese Prime Minister Shinzo Abe.
He said some news reports about the US and the TPP had been wrong.
Last week, US Senator Ben Sasse told reporters that the president had directed White House Economic Adviser Larry Kudlow and US Trade Representative Robert Lighthizer to negotiate the re-entry of the US into the pact.
But on Wednesday Trump asserted, "Unless they offer us a deal ... I would not go back into TPP."
The economic events calendar on Thursday has UK retail sales data at 0930 BST and US initial jobless claims and Philadelphia Federal Reserve manufacturing survey at 1330 BST.
In addition, Deputy Governor for Financial Stability Jon Cunliffe will speak at the FIA Global Finance Forum, in Washington DC, at around 1730 BST.
