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LONDON MARKET EARLY CALL: Lukewarm Open Seen Ahead Of US-China Talks

Thu, 10th Oct 2019 06:49

(Alliance News) - Stocks in London are set for a cautious open on Wednesday ahead of the latest round of US-China trade talks.

IG says futures indicate the FTSE 100 index of large-caps to open 1.6 points lower at 7,164.90 on Thursday. The FTSE 100 index closed up 23.35 points, or 0.3%, at 7,166.50 on Wednesday.

"The much talked about trade talks between the US and China will kick off today. Yesterday we heard that China are interested in brokering a partial trade deal, which helped stocks in Europe as well as the US. The positive signals from China are all well and good, but hopes aren’t too high as certain topics are not up for discussion as far as China are concerned," said David Madden at CMC Markets.

The Chinese delegation headed by Vice Premier Liu He will meet with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin in a renewed attempt to end a trade war that threatens global economic growth.

Recent US decisions have damped hopes that these talks will lead to a positive outcome, however. These include Washington's decision to place visa restrictions on Chinese officials over accusations of human rights violations against minority Muslim Uighurs and to blacklist 28 Chinese organizations that the US says pose a risk to national security.

In the US on Wednesday, Wall Street ended higher, with the Dow Jones Industrial Average ending up 0.9%, the S&P 500 up 0.9% and the Nasdaq Composite up 1.0%.

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

The economic events calendar on Thursday has UK industrial and manufacturing figures, along with a gross domestic product estimate for August, at 0930 BST and US inflation readings at 1330 BST.

"The British production data could confirm the expectation of a slight improvement in August. Pound bears remain alert to any disappointment to send cable below the USD1.22-support," commented Ipek Ozkardeskaya at London Capital Group.

The pound was quoted at USD1.2228 early Thursday, flat on USD1.2222 late Wednesday.

Britain and the EU on Wednesday agreed to hold last-ditch talks aimed at securing a Brexit deal with just days left to thrash out an agreement, as the two sides accuse each other of failing to compromise.

Brexit Secretary Steve Barclay will meet his EU counterpart Michel Barnier in Brussels in an attempt to break the impasse before an October 17-18 summit.

Barnier played down hopes of a breakthrough before EU leaders meet, even as he promised to work around the clock to the deadline. He said the EU could not accept Britain's proposals as they stand, arguing they would undermine peace and weaken the European single market.

The UK corporate calendar on Thursday has trading statements from fund supermarket Hargreaves Lansdown, paper and packaging firm Mondi, and homewares retailer Dunelm Group. There are interim results from Jacamo, JD Williams and Simply Be clothing brands owner N Brown Group.

By Lucy Heming; lucyheming@alliancenews.com

Copyright 2019 Alliance News Limited. All Rights Reserved.

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