TIP: Prefer desktop view on phone? Use the view switcher at the bottom of the mobile view

LONDON MARKET EARLY CALL: Higher Call On US Interest Rate Cut Hope

Fri, 12th Jul 2019 07:00

(Alliance News) - Stock prices in London are seen opening higher on Friday, following record highs being set in the US on Thursday, amid optimism that the US Federal Reserve will cut interest rates at its upcoming monetary policy meeting at the end of July.

IG futures indicate the FTSE 100 index is to open 28.18 points higher at 7,538.00. The blue-chip index closed down 20.87 points, or 0.3%, at 7,509.82 on Thursday.

In the US on Thursday, Wall Street ended broadly higher, with the Dow Jones Industrial Average up 227.88 points, or 0.9%, and the S&P 500 up 0.2%. The Dow ended above 27,000 for the first time on Thursday and the S&P closed within touching distance of the 3,000 mark.

However, the Nasdaq Composite index closed down 0.1%.

The latest equity milestone for the Dow, which was accompanied by a fresh record for the S&P 500, came as US Federal Reserve Chair Jerome Powell completed a second day of congressional testimony, during which he emphasized economic risks in remarks that were widely interpreted as signaling a likely interest rate cut.

CMC Markets analyst David Madden said: "Jerome Powell left the door open to interest rate cuts, and that helped the Dow Jones trade above 27,000 - for the first time ever. Given how much expectations have been built up, markets are likely to react badly should interest rates be kept on hold later this month.

"The Fed boss might trim rates later this month, and drop another hint about potentially lower rates later this year as a way of keeping equity markets on side. There has been a lot of talk of rates being cut by 50 basis points, but some people think that would be excessive when you remember that the unemployment is close to a 50 year low."

The Japanese Nikkei 225 index is up 0.2% on Friday. In China, the Shanghai Composite is up 0.5%, while the Hang Seng index in Hong Kong is up 0.4%.

The pound was quoted at USD1.2545 early Friday, marginally lower than USD1.2555 at the London equities close Thursday.

The economic events calendar on Friday has eurozone industrial production figures at 1000 BST and US producer prices at 1330 BST.

The UK corporate calendar on Friday has trading statements from emerging markets-focused asset manager Ashmore Group and no-frills gymnasiums operator Gym Group.

More News

Tertiary Minerals sells 31.5 million shares in Sunrise

(Sharecast News) - Tertiary Minerals announced on Thursday that it has sold 31.5 million shares in Sunrise at a price of 0.08p per share, for a total consideration of £25,200.

Today 10:08

Fox Marble suspends operations at Malesheva amid acquisition dispute

(Sharecast News) - Kosovo-focussed marble quarrying and processing company Fox Marble has suspended operations in its Malesheva quarry, it announced on Thursday, pending a resolution to the dispute with its acquisition target Green Power and Scope, as it disclosed on 26 June.

Today 10:06

Cello Health reports solid growth in 'strong' first half

(Sharecast News) - Advisory group Cello Health anticipates that full-year earnings will "at least be in line with current expectations" after recording growth across the whole business.

Today 09:44

Stonegate to buy EI Group for ?1.3bn

(Sharecast News) - Pub company EI Group saw its shares rocket on Thursday as it agreed to be bought by Slug & Lettuce owner Stonegate for £1.3bn.

Today 09:38

Login to your account

Don't have an account? Click here to register.