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LONDON MARKET EARLY CALL: Stocks Seen Flat As China Data Disappoints

Fri, 14th Aug 2020 07:01

(Alliance News) - Stock prices in London are seen opening flat on Friday after economic data from China raised concerns about the fragility of the world's second-largest economy's emergence from the coronavirus crisis.

IG futures indicate the FTSE 100 index is to open just 5.68 points higher at 6,191.30. The blue-chip index closed down 94.50 points, or 1.5%, at 6,185.62 Thursday.

The Japanese Nikkei 225 index is up 0.1%. In China, the Shanghai Composite is up 0.2%, while the Hang Seng index in Hong Kong is flat.

China's retail sales dropped in July, official data showed Friday. The key indicator of consumer sentiment shrank by 1.1% on-year, falling short of forecasts and suggesting many are still reticent about going out to spend time and money, even as China appears to have the virus largely under control. The latest data follows a drop of 1.8% on-year for retail sales in June.

Industrial production grew by 4.8% in July, the same as the previous month but below predictions of 5.2% growth.

CMC Markets analyst Michael Hewson commented: "Earlier this morning, we got the latest retail sales and industrial production numbers from China for the month of July, and they continue to point to a weak recovery in the region.

"As such today's European open is expected to see stocks come in broadly unchanged, with the main focus on the latest iteration of eurozone second-quarter GDP, which is expected to come in unchanged and US retail sales later this afternoon."

In the US on Thursday, Wall Street ended mostly lower, with the Dow Jones Industrial Average down 0.3%, S&P 500 down 0.2% and Nasdaq Composite up 0.3%.

The US Senate on Thursday adjourned until September for summer recess, despite not reaching an agreement over a fresh round of stimulus to help the virus-battered economy and struggling Americans.

Congress and the White House have spent the past few weeks debating what to include in the package, but have been unable to come to an agreement.

The pound was quoted at USD1.3067 on Friday morning, down from USD1.3084 at London equities close Thursday.

The euro was priced at USD1.1817, lower from USD1.1830. Against the yen, the dollar was quoted at JPY106.85, flat from JPY106.90.

In commodities, Brent oil was trading at USD45.11 a barrel Friday morning, flat from USD45.18 a barrel Thursday evening in London.

Gold was quoted at USD1,953.86 an ounce, slightly higher from USD1,947.60 an ounce at the London equities close Thursday.

In Friday's economic calendar, there is a French consumer price index print at 0745 BST, followed by eurozone GDP reading at 1000 BST. Then in the afternoon, there is US retail sales at 1330 BST, with industrial production at 1415 BST and the Michigan consumer sentiment index at 1500 BST.

A quiet UK corporate calendar on Friday sees retail and leisure real estate investor NewRiver REIT issue first-quarter results.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.

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