(Alliance News) - Stock prices in London are seen opening higher on Wednesday, ahead of a raft of service sector PMI readings in Europe in the morning and with results still being counted from the two pivotal US senate runoff elections in Georgia.
IG futures indicate the FTSE 100 index is to open 56.2 points higher at 6,668.45 on Wednesday. The blue-chip index closed up 40.37 points, or 0.6%, at 6,612.25 on Tuesday.
"As it stands now, one race looks to be wrapped up in favour of the Democratic candidate," Axi analyst Stephen Innes said.
"Best case for the Republicans tonight from here is a split result, and it will be extremely tight if it is - thus open to recount - but looking very likely to be a Democratic sweep."
Georgia Democrat Raphael Warnock claimed victory Tuesday night in a key US Senate race against Republican Kelly Loeffler – who has not conceded defeat.
US officials and major media had yet to declare a winner for either of the two Georgia seats at stake, both of which Joe Biden's Democrats need to flip to take control of the Senate.
If Democrats win both seats they win back the Senate, effectively handing Biden all levers of political power in Washington and helping him enact his ambitious legislative agenda. The split will be 50-50 but Vice President Kamala Harris will have a tie-breaking vote.
The pound was quoted at USD1.3625 early on Wednesday, up from USD1.3611 at the London equities close.
Danske Bank analyst Kristoffer Lomholt noted that UK Prime Minister Boris Johnson on Tuesday evening "vowed to speed up the government's vaccination programme".
Johnson said that, so far, more than 1.3 million people have been vaccinated against Covid-19 across the UK, including 23% of all the over 80s in England. In the same televised address, he noted that one in 50 people had coronavirus last week.
"The number of new Covid-19 cases in a day in the UK topped 60,000 for the first time and there is a growing feeling that things will get worse before they will get better. On the other side of the coin, dealers are mindful that vaccinations are being rolled out but the process is likely to be slow, so governments are unlikely to rolling back on restrictions anytime soon," CMC Markets Analyst David Madden said.
The euro stood at USD1.2311 on Wednesday morning, up from USD1.2280 at the European equities close on Tuesday. Against the yen, the dollar was trading at JPY102.75, flat from the London market close on Tuesday.
In Asia, Japan's Nikkei 225 closed down 0.4% on Wednesday. Eyes in Tokyo are on the government as it prepares to declare a state of emergency on Thursday that will focus largely on bars and restaurants in the greater Tokyo region to fight the fast spread of coronavirus infections.
Officials have said the measure will be "focused" and "limited" and reports suggest it will last about a month.
In China, the Shanghai Composite was up 0.5% and the Hang Seng Index in Hong Kong was 0.1% lower.
The pace of growth in China's service industry slowed in December, data from Caixin showed Wednesday, mirroring the country's manufacturing sector.
The headline seasonally adjusted business activity index fell to 56.3 in December from 57.8 in November. The dip was blamed on softer new business growth with only a "modest" rise in new export sales.
With the end of his presidency looming, US President Donald Trump on Tuesday launched a crusade against Chinese apps, branding them a threat to US national security.
Trump ordered a ban on transactions involving Alipay, WeChat Pay and other apps linked to Chinese companies, saying they could route user information to the government in Beijing.
The executive order is to take effect in 45 days, just weeks after Trump is replaced in the White House by President-elect Joe Biden on January 20.
In the US on Tuesday, Wall Street ended in the green, with the Dow Jones Industrial Average gaining 0.6%, the S&P 500 0.7% and the Nasdaq Composite 1.0%.
"It was the energy markets that provided the soothing balm after Saudi Arabia's ground-breaking intervention on the oil markets overnight," said Axi's Innes.
Brent oil was quoted at USD53.90 on Wednesday morning UK time, up from USD53.01 a barrel at the London equities close on Tuesday.
Oil prices shot higher Tuesday following Saudi Arabia's surprise announcement that it would trim production.
Members of the oil cartel OPEC and their partners agreed Tuesday to raise output slightly in February and March, but only in Russia and Kazakhstan, while Saudi Arabian Energy Minister Prince Abdulaziz bin Salman announced that the country would cut its own production by one million barrels per day in both months.
On Wall Street, Chevron rose 2.7% on Tuesday and gained 0.3% after hours while Exxon jumped 4.8% in regular trading and added 0.7% after hours.
Shares in London-listed oil majors BP, Royal Dutch Shell 'A' and Shell 'B' ended up 7.1%, 6.9% and 6.3% respectively on Tuesday.
Gold was quoted at USD1,944.82 an ounce early on Wednesday, down from USD1,947.54 at the London equities close Tuesday.
The economic events calendar on Wednesday has services PMI readings from Germany, eurozone and the UK at 0855 GMT, 0900 GMT and 0930 GMT respectively. There is also US ADP Employment Change figures at 1315 GMT.
The UK corporate calendar on Wednesday has a trading statement from bakery chain Greggs.
By Eric Cunha; ericcunha@alliancenews.com;
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