LONDON (Alliance News) - UK stocks are set to open broadly flat on Friday after a weak trading performance on Thursday caused by Ukrainian accusations of a Russian invasion and ahead of a reading of eurozone inflation later Friday that could push the European Central Bank to apply more stimulus.
Futures indicate the FTSE 100 will open marginally higher at 6,808.5. The index closed at 6,805.8 on Thursday.
US stocks performed poorly Thursday, with the DJIA falling 0.3% and the S&P 500 falling below the 2,000 milestone, ending the day down 0.2%. The NASDAQ Composite bucked the trend by closing up 0.1%.
Trading in Asia has been mixed on the back of disappointing Japanese inflation and unemployment data. Year-on-year consumer price index for July showed growth of 3.4%, slowing from 3.6% in June. Meanwhile, Japanese unemployment to 3.8% in July from 3.7% in June.
The Nikkei closed down 0.2% while the SSE Composite trades up 0.5% and the Hang Seng trades down 0.2%.
UK stocks on Thursday experienced losses as Ukrainian President Petro Poroshenko accused Russia of a military invasion in the east. The Ukraine military said it had lost control of border cities in the south-east in what would be a "second front" in the conflict. There was also a NATO report that estimated that more than 1,000 Russian solders were fighting among pro-Russian separatists, while insurgents conceded the number to be up to 4,000.
"There had been some optimism earlier this week that the meeting between President Putin and Ukraine President Poroshenko could well be a catalyst for a reduction in tensions, while in fact it turns out the opposite could well be the case, as once again President Putin?s conciliatory words are not matched by his deeds, or more to the point to the actions of his forces," says CMC Markets analyst Michael Hewson.
There was also disappointing economic data on Thursday, as the number of unemployed in Germany increased by 1,000 in August and missing economists' expectation of a 5,000 decrease. German CPI met expectations with the year-on-year figure showing a growth of 0.6% in August, while the month-on-month figure came in flat.
These results come ahead of eurozone inflation figures to be released at 1000 BST Friday, which could provide an indication of what the ECB will do at next week's meeting.
"Perhaps it [Eurozone CPI] would not be enough to force the introduction of asset purchases. However it could also be enough to generate a more open and willing response with regards to whether the ECB are actively seeing it as a likely option," says Alpari analyst Joshua Mahony.
In corporate news, oil and gas explorer and producer Afren has released its interim results. On Thursday, the company said it has temporarily suspended associate directors Iain Wright and Galib Virani after they made the Afren board aware that they have received payments which are linked to the previously identified unauthorised payments for the benefit of the CEO and COO. Afren has reported a pretax profit of USD133 million for the first half of 2014, down from USD260 million at the same period in 2013.
Interim results have also been released for Computacenter, Perform Group, Berendsen, Exova Group and Restaurant Group.
By Neil Thakrar; neilthakrar@alliancenews.com
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