LONDON (Alliance News) - UK stocks are set to open higher Thursday following a strong finish on Wall Street and continued stimulus measures by the Chinese central bank.
IG says futures indicate the FTSE 100 to open higher at 6,088.9. The index ended down 1.7% at 5,979.20 points on Wednesday, after its rebound at the US open lost momentum.
Wall Street managed to hold onto its strong gains Wednesday, with the DJIA closing up 4.0%, the S&P 500 ending up 3.9% and the Nasdaq Composite closing up 4.2%. It was the biggest one-day gain for the Dow since 2011 and snaps a run of six consecutive losses.
The recent fall in global stock prices have been sparked by ongoing concerns about the Chinese economy and volatility in its stock markets. On Tuesday, the People's Bank of China cut its key interest rates and reserve ratio in an effort to stem heavy losses in its stock market and support its slowing economy. On Wednesday China's central bank injected CNY140 billion into the financial system through its short-term liquidity operations facility.
"The combined effort of these two stimulus measures appears to have brought some stability to Chinese markets for now, and the Shanghai Composite is actually on course to record its first gains since last Wednesday," says Craig Erlam, senior market analyst at Oanda. "Of course, as we?ve seen repeatedly and not just in China, these gains can be rapidly reversed and investor behaviour into the close today will tell us a lot about just how much anxiety there still is."
In Asia Thursday, the Nikkei in Tokyo is up 1.3%, the Hang Seng trades up 2.3% and the Shanghai Composite is up 1.4%.
Meanwhile, New York Federal Reserve President William Dudley said Wednesday in New York that a rate hike next month "seem less compelling to me [now] than it was a few weeks ago". Nevertheless, as US Fed Chair Janet Yellen has said before, Dudley said that he expects the US central bank to raise rates this year, and repeated that moves on monetary policy remain "data-dependent".
In a busy UK corporate calendar, CRH, AMEC Foster Wheeler, Hays, Evraz, Hansteen Holdings, Lamprell, Melrose Industries, STV, Hunting, Marshalls, Petropavlovsk, Playtech, Sopheon, Xaar, John Laing Group, Nomad Foods and Fyffes release half-year results, among many others.
In the economic calendar, German import prices and UK Nationwide housing prices are due at 0700 BST. In the US, alongside the start of Jackson Hole symposium, there are initial and continuing jobless claims and the Gross Domestic Product Price Index at 1330 BST. US pending home sales are due at 1500 BST, while Energy Information Administration natural gas storage is at 1530 BST.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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