LONDON MARKET EARLY-CALL: Stocks Seen Firm; China Devalues Yuan Again

LONDON (Alliance News) - UK shares are set to open higher Thursday, paring losses from the past couple of days, while China's central bank devalued the yuan for the third time in three days.

The People's Bank of China unexpectedly adjusted its daily reference exchange rate by a further 1.1%, setting it at 6.4010 to the US dollar. On Tuesday the bank had cut the rate by 1.9%, followed by a 1.6% drop on Wednesday.

The central bank has yet to confirm the Thursday adjustment, but the change was listed on the website of the official China Foreign Exchange Trade System.

The yuan currently trades at USD6.402, having touched a four-year high of USD6.4374 in earlier trade.

In Asia on Thursday, the Japanese Nikkei 225 trades up 1.1%. In China, stocks are mixed, with the Hang Seng in Hong Kong up 1.1% and the Shanghai Composite down 0.1%.

The European Central Bank is expected to release the accounts of last month?s monetary policy meeting at 1230 BST.

"The report will offer in-depth insight into policy makers views on the economy and what those views are based on," says Oanda analyst Craig Erlam. "While the [European] central bank is not currently considering a change to its monetary policy, the minutes can offer insight into the pace and longevity of its quantitative easing program when taking into consideration current conditions."

The Oanda analyst says he expects the ECB to continue to buy bonds until at least September next year, despite some suggestions earlier this year that they may pull the plug early.

IG says futures indicate the FTSE 100 to open 28 points higher at 6,599.60. The index closed down 1.4% at 6,571.19.

On the UK corporate front, tourism and travel operator TUI posted higher revenue for the third quarter of its financial year and for the first nine months, despite its quarter being clouded by the terrorist attack in Tunisia. TUI said its earnings before interest, taxation and amortisation rose to EUR130 million from EUR92 million in the third quarter to the end of June and its loss for the first nine months of the year narrowed to EUR239 million from EUR242 million.

TUI said it is currently confident of delivering underlying earnings growth of 12.5% to 15.0% for its current financial year, with trading in the summer months so far proving solid.

In the economic calendar Thursday, the German and French consumer price indices are due at 0700 BST and 0745 BST, respectively. In the US, retail sales and initial and continuing jobless claims are expected at 1330 BST. US Business inventories are expected at 1500 BST.

Wall Street ended flat to higher, with the DJIA flat, the S&P 500 up 0.1% and the Nasdaq Composite up 0.2%.

Still in the UK corporate calendar, Coca-Cola HBC releases half-year results, and Glencore releases its half-year production report. Infinis Energy and Grainger issue interim management statements, while Cineworld Group, Michael Page International, Derwent London and Ophir Energy and Promethean World publish half-year results.

Also Thursday, blue-chips as Fresnillo, Rio Tinto, Diageo, BG Group, BT Group, GlaxoSmithKline and Pearson, among many other London-listed companies, go ex-dividend, meaning new buyers no longer qualify for the latest dividend payout.

By Daniel Ruiz; danielruiz@alliancenews.com

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