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LONDON (Alliance News) - UK stocks were set to open heavily lower Monday as the continued rout in Asian stocks feeds over to London, while oil prices have fallen to new lows.
In Asia Monday, the Nikkei in Tokyo was down 4.5%, the Hang Seng traded down 5.1%, and the Shanghai Composite was off 8.2%. Mounting evidence that China is going through a rough economic patch has hit the global commodities and equities markets.
Oil prices have fallen to new six-and-a-half-year lows. Brent oil hit a low of USD44.21 a barrel on Monday, while West Texas Intermediate fell to USD38.98 a barrel.
In response to the continued stock market declines, China is planning to allow its state pension fund to invest in stock markets for the first time, the BBC reported, citing a report by Chinese official news agency Xinhua. The BBC said the new rules will allow the fund to invest up to 30% of its net assets in domestically-listed shares. The fund currently holds CNY35 trillion in assets, according to Xinhua. The fund will be allow to invest not only in shares but in a range of market instruments, including derivatives.
An hour before the open, IG said futures indicated the FTSE 100 to open down at 6,019.4. The index closed down 2.8% at 6,187.65 on Friday, its lowest level of the year so far.
On Wall Street Friday, the DJIA closed down 3.1%, the S&P 500 ended down 3.2%, and the Nasdaq Composite closed off 3.5%.
In the UK economic calendar, there are interim results from distribution and outsourcing company Bunzl, specialty insurer Amlin, floorcoverings distributor Headlam Group, Industrial Multi Property Trust and Irish property and casualty insurer FBD Holdings.
In a very light corporate calendar, there is Chicago Fed National Activity Index at 1330 BST, before Federal Reserve Bank of Atlanta President Dennis Lockhart speaks at 2055 BST.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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