LONDON MARKET EARLY CALL: "Good signs" in US-Iran talks

(Alliance News) - Stocks in London are set to open higher, rounding off a positive week for the FTSE 100, after the US Secretary of State reported some promising signs in talks with Iran.

IG says futures indicate the FTSE 100 to open 46.0 points higher, 0.4% at 10,489.47 on Friday. The index of London large-caps closed up 11.13 points, 0.1%, at 10,443.47. It has risen 2.4% so far this week.

In the US on Thursday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.6%, the S&P 500 up 0.2% and the Nasdaq Composite up 0.1%.

In Tokyo on Friday, the Nikkei 225 surged 2.8%. In China, the Shanghai Composite rose 0.8%, while the Hang Seng Index in Hong Kong shot up 1.3%. The S&P/ASX 200 in Sydney rose 0.3%.

Swissquote analyst Ipek Ozkardeskaya commented: "Yesterday morning in Europe, the news that Iran wanted enriched uranium to remain in Iran echoed negatively across markets, pushing oil prices and yields higher while sending equities lower. Some European indices indeed closed the day in the red, also due to a set of terrible-looking PMI numbers.

"But as the session progressed, pessimism over Iran turned into optimism — optimism that the gap between the US and Iran may be narrowing. Some officials made very vague comments that met immediate positive reaction."

The analyst continued: "What is certain, however, is that the clock is ticking louder. Come July, if traffic through the Strait of Hormuz is not fully restored, oil reserves could retreat to alarming levels — a scenario investors have somehow refused to price as the base case. And by September, recession across many global economies could become the base-case scenario."

A barrel of Brent fell to USD104.51 early Friday, from USD107.98 at the time of the London equities close on Thursday. Gold rose to USD4,532.81 an ounce from USD4,508.26.

US Secretary of State Marco Rubio on Thursday said there were "some good signs" in the negotiations between the US and Iran, but added that he did not want to be "overly optimistic".

Sterling rose to USD1.3429 early Friday, from USD1.3401 late Thursday afternoon. Against the euro, it faded to EUR1.1558 from EUR1.1566. The euro climbed to USD1.1614 from USD1.1587. Against the yen, the dollar faded to JPY159.09 from JPY159.17.

The yield on the 10-year US Treasury narrowed to 4.57% from 4.62% late Thursday. The 30-year yield cooled to 5.09% from 5.14%.

Friday's global economic calendar includes PPI and retail sales figures from Canada, German GDP data, and UK public sector borrowing and retail sales numbers at 0700 BST.

Friday's local corporate calendar has full-year results from Helical.

By Eric Cunha, Alliance News news editor

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