LONDON (Alliance News) - UK equities are set to follow their US counterparts and open close to flat Tuesday, ahead of a day lacking in economic data.
The sharp fall in Brent oil prices, which sparked a global equity rally Monday, "went pretty much into full reverse as the day went on," says Michael Hewson, chief market analyst at CMC Markets. As a result, with few macro-economic drivers scheduled to be released, UK stocks are expected to be more subdued at the London open Tuesday.
Oil prices plummeted Monday after the six western powers and Iran reached an agreement on the Middle East country's nuclear program, which is expected to improve the international crude oil supply situation.
After initially rising on the low price of oil, the DJIA and Nasdaq Composite closed up just 0.1%, while the S&P 500 closed 0.1% lower.
CMC Markets indicates that the FTSE 100 will open flat at 6,695 points, while IG is calling the index to open fractionally lower at approximately 6,691.8 points.
UK service sector firms are feeling bullish about their prospects following a second successive quarter of solid growth in activity, a survey from the Confederation of British Industry revealed overnight. In consumer services, optimism about business conditions during the three months to November showed a balance of 33%, the fastest since August 1999. At the same time, optimism among business and professional services came in at 47%, the highest since the survey began in November 1998.
Further, the survey revealed that the service sector companies are employing new staff at the fastest rate in six years.
Stephen Gifford, CBI Director of Economics said, "Business activity is up, more people are being employed, and optimism is rising fast." "These are encouraging signs that the recovery is taking hold across the services sector and that investment is picking up."
In the data calendar Tuesday, UK inflation data are due at 1000 GMT. In the US, housing starts and building permit data for both September and October are released at 1330 GMT. US consumer confidence for November is scheduled for 1500 GMT, with the figure expected to show an improvement to 72.9, from 71.2 previously.
In corporate news, blue-chip Severn Trent has been joined by FTSE 250-listed De La Rue and KCOM Group, amongst others, in releasing interim results ahead of the London open Tuesday.
By James Kemp; jameskemp@alliancenews.com; @jamespkemp
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