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(Alliance News) - Stock trading in London is set to end the week on a downbeat note, with enthusiasm from New York failing to make it through the night.
In early economic data, the UK economy weathered the lockdown restrictions imposed at the start of 2021 better than expected.
The UK economy contracted 2.9% month-on-month in January, a far better performance than market consensus, according to FXStreet, of a 4.9% decline. This followed 1.2% monthly growth in December.
However, the pound slipped further. Sterling was quoted at USD1.3945 after the data, weakening from USD1.3970 at the London equities close on Thursday.
In early UK company news, Burberry expects full-year profit ahead of market consensus. JD Sports Fashion has agreed to buy 60% of Poland-based Marketing Investment Group. Hammerson revealed a hit to net asset value and rental income from the pandemic.
IG says futures indicate the FTSE 100 index of large-caps to open down 29.36 points, or 0.4%, at 6,707.60 on Friday. The FTSE 100 closed up 11.36 points, or 0.2%, at 6,736.96 on Thursday.
In the US on Thursday, Wall Street ended higher, with the Dow Jones Industrial Average ending up 0.5% and the S&P 500 up 1.0%. The Nasdaq Composite surged an even-more-impressive 2.5%.
"After improving jobless claims and a non-event US 30-year auction greenlighted the buy-everything business as usual trade, big-tech was back overnight. Although still in correction territory, the Nasdaq powered 2.52% higher, while the S&P 500 and Dow Jones ended in record territory, rising 1.04% and 0.58%, respectively," said Jeffery Halley at Oanda.
Sentiment was also boosted after US President Joe Biden signed a massive USD1.9 trillion economic stimulus bill Thursday.
Biden called the American Rescue Plan "historic" as he signed the package into law in the Oval Office. The bill, passed by Congress earlier this week, dishes out USD1,400 payments to most Americans, helps the unemployed, expands public health care and ramps up funds for vaccinations.
"This fight is far from over," Biden said in his first televised primetime address as president, marking 12 months since the coronavirus outbreak was declared a pandemic.
If Americans stay the course, they may be able to mark their cherished July 4th national holiday in somewhat normal circumstances, he added.
However, Oanda's Halley said: "US futures are pausing for breath in Asia, and the region is delivering a mixed performance today, with some regional markets pausing for breath."
The Japanese Nikkei 225 index closed up 1.7% Friday. In China, the Shanghai Composite was up 0.5%, while the Hang Seng index in Hong Kong was down 1.6%. The S&P/ASX 200 in Sydney gained 0.8%.
The EU on Thursday warned China it could take "additional steps" as it condemned a vote by Beijing's rubber-stamp parliament for sweeping changes to Hong Kong's electoral system.
The US also criticised the move, accusing China of stifling democracy in Hong Kong.
A Beijing official in charge of Hong Kong policy told reporters Friday the "chaos" of recent years showed that the city's electoral system has "clear loopholes and shortcomings". Alongside the national security law, the move represents "a combination of punches, to...effectively manage the ongoing chaos", said Zhang Xiaoming, of the Hong Kong & Macau Affairs Office.
The euro traded at USD1.1944 early Friday, lower than USD1.1960 late Thursday. Against the yen, the dollar rose to JPY109.02 versus JPY108.51.
Gold was quoted at USD1,710.49 an ounce early Friday, lower than USD1,722.35 on Thursday. Brent oil eased to USD69.15 from USD69.32 late Thursday.
In early UK company news, Burberry said it expects to report revenue and profit for its soon-to-end financial year ahead of market forecasts.
Since December, the luxury fashion brand said it has continued to see a "strong rebound", with fourth quarter comparable store retail sales expected to be between 28% to 32% higher year-on-year.
Thus, it expects revenue and adjusted operating profit to be ahead of consensus expectations.
For the full financial year ending March 27, revenue is expected to decline around 10% to 11%, and the adjusted operating margin will be in a range of 15.5% to 16.5%.
Housebuilder Berkeley said it has continued to trade "robustly" since the half-year.
The company said it remains on track to deliver, in line with guidance, a similar profit to last year of GBP504 million, and forward sales are expected to be above GBP1.7 billion at the year-end.
The market fundamentals remain strong, Berkeley said, while sales reservations have been "robust".
"Looking forward, Berkeley is on track to deliver a similar level of profitability in its next financial year and to achieve its long-term 15% pre-tax return on equity guidance. This underpins Berkeley's ongoing commitment to return GBP280 million per annum to shareholders," the company said.
JD Sports Fashion said it has agreed to buy a 60% stake in Krakow, Poland-based Marketing Investment Group.
The business operates 410 retail stores, and associated trading websites, across nine countries in central and eastern Europe selling sports fashion footwear, apparel and accessories. In the financial year ended January 31, 2020, MIG generated GBP200 million in revenue.
"This is an exciting acquisition for JD that will further build on the success of our international development strategy, expanding our operations into Central and Eastern Europe," said Executive Chair Peter Cowgill.
No financial details of the deal were given, with JD noting that the size of the transaction does not meet the thresholds for mandatory notification. However, it confirmed that put and call options have been agreed, to enable future exit opportunities for the sellers "with whom we will work in partnership".
Shopping centre owner Hammerson reported EPRA net tangible assets of 82p per share as at the end of 2020, down 29% respectively on 116p at the end of 2019.
Hammerson said it was "hit hard" by the pandemic.
"The retail sector, already in the grip of major structural change, has been significantly impacted by the restrictions imposed to tackle the pandemic, and we've also seen an increasing number of retail failures. Combined, this has resulted in the largest fall in net rental income and UK asset values in the Group's history," said Chief Executive Rita-Rose Gagne.
Net rental income slumped 49% to GBP157.6 million, tumbling 41% on a like-for-like basis, excluding premium outlets.
The economic events calendar on Friday also has US producer prices at 1330 GMT.
By Lucy Heming; lucyheming@alliancenews.com
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