(Alliance News) - Stock prices in London are seen opening lower on Wednesday, tracking falls in Asian equity markets overnight amid rising inflation fears, as markets look ahead to US Federal Reserve policy meeting minutes.
IG futures indicate the FTSE 100 index is to open 54.54 points lower at 6,979.70. The blue-chip index closed up just 1.39 points at 7,034.24 on Tuesday.
In Asia, the Japanese Nikkei 225 index was down 1.7% on Wednesday. In China, the Shanghai Composite was down 0.6%, while markets were closed in Hong Kong for the National Day holiday. The S&P/ASX 200 in Sydney ended 2.0% lower.
In the US on Tuesday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.8%, S&P 500 down 0.9% and Nasdaq Composite down 0.6%.
US stock trading has been choppy over the past few weeks, as investors weigh signs of rising inflation against hopes for strengthening economic growth in the second half of 2021.
This comes ahead of Wednesday's release of Federal Reserve meeting minutes at 1900 BST. The central bank has repeatedly emphasized it will maintain its easy-money stance, but volatility in markets show investors remain unconvinced by those assurances.
The minutes of the Fed's April meeting could give a fuller view of FOMC members' thoughts about rising prices.
Meanwhile, fears over the spread over the Indian variant of Covid-19 in the UK remain prevalent. Health Secretary Matt Hancock has voiced his frustration that some people are still not getting the coronavirus vaccine, including people in hospital in Bolton - which has been particularly hard-hit by the Indian strain.
"Markets appear caught between concerns over rising cases and the spread of the India variant of coronavirus, and optimism over the so-called reopening trade, making it difficult to read the direction of the next move. This paralysis of indecision is likely to see markets here in Europe open lower this morning," said CMC Markets analyst Michael Hewson.
"One of the main worries that has been creating volatility in financial markets this past few weeks has been the potential for a sharp rise in inflationary pressures. These concerns have started to gain ever more traction after big surges in US and Chinese inflation last week."
The pound was quoted at USD1.4190 early Wednesday, flat from USD1.4189 at the London equities close Tuesday.
The euro was priced at USD1.2235, up from USD1.2206. Against the yen, the dollar was trading at JPY108.91, flat from JPY108.94.
Brent oil was quoted at USD68.01 a barrel Wednesday morning, down from USD69.36 late Tuesday. Gold was trading at USD1,867.98 an ounce, little changed from USD1,868.50.
The economic events calendar on Wednesday has UK consumer and producer prices at 0700 BST and eurozone consumer prices at 1000 BST. US MBA mortgage applications are at 1200 BST.
In the UK corporate calendar, BAE Systems will issue a trading statement, while full-year results are expected from credit checking agency Experian and utility Severn Trent. Pub operators Mitchells & Butlers and Marston's will issue half-year results.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.