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(Alliance News) - After a lacklustre end to July, London stocks look set to take their cue from gains in Asian markets overnight and bounce into August.
IG says futures indicate the FTSE 100 index of large-caps to open up 40.2 points, or 0.6%, at 7,072.50 on Monday. The FTSE 100 closed down 46.12 points, or 0.7%, at 7,032.30 on Friday.
"After a sour end to last week, risk sentiment is rebounding somewhat this morning," said Danske Bank.
In Asia on Monday, the Japanese Nikkei 225 index was up 1.9%. In China, the Shanghai Composite was up 1.4%, while the Hang Seng index in Hong Kong was up 1.2%.
The S&P/ASX 200 in Sydney was up 1.3% in late trade.
"Last week Asia markets saw big declines due to a regulatory crackdown in China, with the Nikkei more or less trading near to its lows this year and the Hang Seng trading at a nine-month low. The extent of the falls appeared to prompt a partial backtrack, or softening of tone by the Chinese authorities prompting a little bit of a rebound which appears to have continued today in Asia," said Michael Hewson, chief market analyst at CMC Markets.
"This looks set to translate into a positive open for European markets as we look ahead to a big week of economic data."
As Monday's data calendar kicked off, China's manufacturing sector eked out some growth in July, but saw its weakest improvement for 15 months.
The headline seasonally adjusted purchasing managers' index slipped to 50.3 points in July from 51.3 in June. This left it barely above the neutral 50.0 point mark.
In Japan, meanwhile, the manufacturing sector continued to expand last month, having seen its strongest improvement since April as output and new orders drove its expansion.
The headline au Jibun Bank Japan manufacturing PMI – a composite single-figure indicator of manufacturing performance - rose to 53.0 in July from 52.4 in June.
Against the yen, the dollar eased to JPY109.66 versus JPY109.74.
To come are manufacturing PMIs from Germany, the eurozone and the UK at 0855 BST, 0900 BST and 0930 BST respectively. A US Markit PMI is due at 1445 BST and the ISM one is reported at 1500 BST. Outside of PMIs, German retail sales are at 0700 BST.
Ahead of the data, sterling was quoted at USD1.3908 early Monday, higher than USD1.3898 at the London equities close on Friday. The euro traded at USD1.1871, up from USD1.1858 late Friday.
On the corporate side, HSBC shares in Hong Kong rose 2.0% after the lender's interim profit more than doubled from the year before. In the six months to June 30, the Asia-focused bank reported pretax profit of USD10.84 billion, up from USD4.32 billion a year before.
Helping to improve the bank's interim profit was a USD719 million credit release, swung from the mammoth USD6.86 billion provision set aside in the first half of 2020. Less positively, net interest margin worsened to 1.21% from 1.43%. HSBC declared an interim dividend of 7 US cents.
Still ahead in the UK corporate calendar for Monday are half-year results from engineering firm Senior and power controllers maker XP Power.
In the US on Friday, Wall Street ended in the red, with the Dow Jones Industrial Average ending down 0.4%, the S&P 500 down 0.4% and the Nasdaq Composite down 0.7%.
US senators on Sunday finalized a historic, trillion-dollar infrastructure proposal that is expected to be approved within days, Democratic Senate leader Chuck Schumer said.
If passed by Congress and signed into law, the bill would pump historic levels of federal funding into fixing US roads, bridges and waterways, ensuring broadband internet for all Americans and expanding clean energy programs.
A bipartisan group "finished writing the text of the infrastructure bill," Schumer told the Senate, which met for an extended weekend session in Washington.
Gold was quoted at USD1,810.69 an ounce early Monday, lower than USD1,821.81 on Friday. Brent oil was trading at USD74.69 a barrel, down from USD76.29.
By Lucy Heming; lucyheming@alliancenews.com
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