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(Alliance News) - Stocks in London are set to open largely flat on Tuesday, as some pre-Federal Reserve decision caution threatens to halt the FTSE 100's recent rally.
IG says futures indicate the FTSE 100 to open down just 1.8 points at 8,145.23 on Tuesday. The index of London large-caps edged up 7.20 points, 0.1%, at 8,147.03
In New York on Monday, equities traded higher, both the Dow Jones Industrial Average and Nasdaq Composite rose 0.4%, while the S&P 500 added 0.3%.
In Tokyo, the Nikkei 225 shot up 1.1%. Financial markets in Tokyo had been closed for a public holiday on Monday. In China, the Shanghai Composite traded 0.2% lower, while the Hang Seng in Hong Kong was down 0.3%. In Sydney, the S&P/ASX 200 was up 0.2% in late trade.
China's factory activity grew for a second successive month in April, data showed Tuesday, providing some much-needed good news for officials as they battle to kickstart the vast economy in the face of weak domestic demand and a battered property sector.
The purchasing managers' index – a key measure of factory output – came in at 50.4, the National Bureau of Statistics said – slightly higher than the 50 level that separates expansion and contraction.
While it was down from March, the figure beat Bloomberg analysts' forecast of 50.3 and marked a continuation of growth after a five-month slump starting in late 2023.
Meanwhile, a separate survey by Caixin showed manufacturing growth picking up speed, with the PMI rising to 51.4 in April from 51.1 in March, expanding for the sixth month in a row.
The pound was quoted at USD1.2534 early Tuesday, down from USD1.2554 late Monday. The euro stood at USD1.0699, falling from USD1.0717. Against the yen, the dollar was trading at JPY156.73, up slightly from JPY156.64.
The economic calendar for Tuesday has a eurozone gross domestic product reading, as well as consumer price inflation data, at 1000 BST.
Commerzbank analyst Ulrich Leuchtmann commented: "After yesterday's German inflation data, there's more to come today, including the eurozone aggregate. Normally, I would consider this data to be highly relevant for EUR exchange rates. After all, inflation is currently one of the biggest sources of uncertainty in the macroeconomic picture, and therefore one of the most relevant drivers of exchange rates. However, this may be an exception at the moment. After all, so many members of the ECB's Governing Council have recently announced a rate cut in June that hell would have to freeze over for it to be called off.
"So this round of inflation numbers is not what matters. It's more about later numbers when it comes to how quickly and how many more rate cuts may follow."
Tuesday's local corporate calendar has annual results from hotel company Whitbread. There is also a trading statement from soft drink bottler Coca-Cola HBC.
Already out, HSBC announced its chief executive intends to retire, as it unveiled a new buyback and special dividend alongside first-quarter results.
The Asia-focused lender said first-quarter net interest income fell 3.4% to USD8.65 billion from USD8.96 billion year-on-year, while net operating income increased 1.5% to USD20.03 billion from USD19.74 billion.
Pretax profit slipped 1.8% to USD12.65 billion, from the prior year's USD12.89 billion. HSBC said it has approved a first interim dividend of USD0.10 per share, as well as a special dividend of USD0.21 following the sale of its Canadian banking business.
In addition, it announced a new share buyback of up to USD3 billion, following the conclusion of the USD2 billion buyback announced with its full-year results.
It left guidance unchanged from that provided in February with the annual results.
"I'm pleased with our start to 2024. We completed the sale of our Canada business and agreed the sale of our Argentina business, both of which allow us to focus on markets with higher value international opportunities. Our good profit performance...in the first quarter has enabled us to continue the trend of rewarding our shareholders," said Chief Executive Noel Quinn.
HSBC said Quinn has informed the board of his intention to retire after nearly five years leading the company.
Brent oil was quoted at USD86.86 a barrel early Tuesday, falling from USD87.27 late Monday. Gold was quoted at USD2,322.61 an ounce, down from USD2,337.40.
By Eric Cunha, Alliance News news editor
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