LONDON MARKET COMMENT: Stocks Seen Lower With UK Inflation In Focus

Tue, 14th Apr 2015 05:58

LONDON (Alliance News) - UK shares are set to open lower Tuesday, with the market focus on the UK inflation data due to be released at 0930 BST and analysts pointing to some profit taking due to lack of catalysts to drive the market higher.

IG says futures indicate the FTSE 100 to open 16 points lower at 7,048.6. The index finished down 0.4% at 7,064.30 Monday, failing to recover from a weak open that saw worse-than-expected Chinese trade data and broker downgrades dig a hole for mining stocks. The index retreated from a record closing high of 7,089.77 and intraday high of 7,095.36, both set on Friday.

"After the strong gains seen last week in Europe it was perhaps inevitable that a new week would see a pause for breath, as investors look around for fresh catalysts to drive the next leg higher," says Michael Hewson, chief market analyst at CMC Markets UK.

"While the uncertainty continues in Europe, the UK is undergoing its own period of uncertainty as the clock ticks down to next month?s election, with both main political parties locked together in the polls," Hewson writes.

"With the release of the latest CPI inflation numbers there is the distinct possibility that we could see prices go negative, if not today, but in next month?s numbers. Expectations are for 0% annual inflation for March, but it wouldn?t surprise at all to see -0.1% given the way food prices have continued to fall as the discount supermarkets continue to push prices lower, while the recent 5% price cuts by British Gas are likely to feed into energy bills for March," the analyst adds.

Wall Street ended lower Monday. The DJIA and the S&P 500 both ended down 0.5%, while the Nasdaq Composite down 0.2%.

In Asia on Tuesday, the Japanese Nikkei 225 trades down 0.1%, and the Hang Seng is down 1.0%. The Shanghai Composite is up 0.3%.

Brent crude is quoted at around USD58.34 a barrel Tuesday, and US benchmark West Texas Intermediate is quoted at USD52.39 a barrel. Gold is quoted early Tuesday at USD1,196.43 an ounce.

Also in the economic calendar Tuesday, the German wholesale price index is due at 0700 BST, and the Italian consumer price index is scheduled for 0900 BST, while eurozone industrial production is at 1000 BST. In the US, the producer price index and retail sales are at 1330 BST. US Redbook index is at 1355 BST.

In the corporate calendar Tuesday, Ashmore Group releases an interim management statement, while Michael Page International publishes a first quarter interim management statement. Poundland issues a fourth quarter trading statement, while Polymetal International releases its full-year results. Porvair releases an interim management statement and International Biotechnology Trust publishes half-year results. Horizon Discovery Group, Keywords Studios and MP Evans publish full-year results.

By Daniel Ruiz; danielruiz@alliancenews.com