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LONDON (Alliance News) - UK stocks are set to open firmly lower Monday, following another sharp sell-off on Wall Street on Friday and a weak Asian session overnight, and as increasing tensions in Ukraine are also likely to hurt investor sentiment.
Wall Street continued its recent down trend on Friday as concerns remain about potentially overvalued stocks, particularly in sectors like technology and biotechnology. Concerns first emerged in the tech-heavy NASDAQ Composite index on April 4 and have weighed on global indices ever since.
US stocks closed significantly lower Friday, with the DJIA down 0.9% and the S&P 500 down 1%. The NASDAQ Composite closed down 1.3% at 3,999.734, the first time it has closed below 4,000 since early February.
In Asia, ahead of the UK equity market open, both the Shanghai Composite index and Nikkei in Tokyo are down 0.4%, while the Hang Seng is marginally lower.
"Even if some investors weren?t nervous about the beginning of earnings season before last week, they probably are now, after a poor earnings report from JP Morgan on Friday helped already jittery US markets tip lower still," said Michael Hewson, chief market analyst at CMC Markets.
"Investors aren't likely to get much comfort today with Citigroup the next in line to report and expectations likely to remain low given the banks? troubles with the Federal Reserve and regulators in the past few months," Hewson warned.
The ongoing tensions in Ukraine also are likely to weigh on investor sentiment Monday.
In the latest developments, Ukraine's acting President Oleksandr Turchynov said pro-Russian separatists must lay down their weapons and leave the police stations and administrative buildings they are occupying in eastern Ukraine, or face a large-scale military operation.
"We will not let Russia repeat the Crimean scenario in the eastern regions of Ukraine," Turchynov said.
In an emergency United Nations Security Council meeting late on Sunday, Russia's ambassador to the UN said that the situation was getting out of control, and that "it is the West that will determine the opportunity to avoid civil war in Ukraine".
The US' ambassador, however, accused Russia of inciting instability in Ukraine and spreading disinformation, ""while the Ukrainians are being confronted by incitement and violence".
Ahead of the UK equity market open, both CMC Markets and IG are calling the FTSE 100 to open firmly lower Monday. CMC indicates the blue-chip index will open down at approximately 6,525 points, after it closed at 6,561.7 on Friday, while IG expects it to open at 6,521 points.
UK house prices rose to a record high, according to property tracking website Rightmove Monday. Asking prices increased at a pace of 7.3% year-on-year in April, following a 6.8% rise in March, while the monthly growth held steady at 2.6% in April.
Still ahead in the data calendar, Italian consumer price inflation figures are released at 0800 GMT, ahead of industrial production data for the euro area at 0900 GMT.
In the US, retail sales figures are published at 1230 GMT, before business inventories information at 1400 GMT.
In corporate news, pharmaceutical major GlaxoSmithKline is facing a criminal probe in Poland for allegedly paying bribes to doctors to promote its asthma drug Seretide, BBC Panorama reported on Sunday. According to the report, eleven doctors and one of Glaxo's regional managers have been charged over alleged corruption between 2010 and 2012. Glaxo is already facing corruption accusations in China and Iraq.
Elsewhere, mining company Glencore Xstrata has agreed to sell its interest in the Las Bambas copper project in Peru to a Chinese consortium for USD5.85 billion in cash.
The consortium, which includes MMG Ltd., Guoxin International Investment Corp. Ltd, and CITIC Metal Co. Ltd., will reimburse all capital expenditure and other costs incurred in developing the project between January 1 and the closing date of the deal. Up until the end of March, this was estimated to be around USD400 million.
Meanwhile, Japanese financial services group Orix Corp is considering bidding for FTSE 100-listed Standard Chartered's consumer credit unit in Hong Kong, according to Bloomberg. Standard Chartered wants to sell the unit for about USD700 million, almost three times book value, and plans to compile a shortlist of potential bidders this month, the report said.
By James Kemp; jameskemp@alliancenews.com; @jamespkemp
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