(Alliance News) - As this week's bumpy ride for markets continues, stock prices in London are set to open lower on Thursday, with fears of a second wave of coronavirus coming to the fore once more.
IG says futures indicate the FTSE 100 index of large-caps to open 56.16 points lower at 5,843.10 on Thursday. The FTSE 100 closed up 69.80 points, or 1.2%, at 5,899.26 on Wednesday. At this closing level, the index was down 1.8% in the week-to-date.
"Fading prospects for US fiscal stimulus and the stepping up of mobility restrictions on concerns about the second wave of Covid-19 are smacking global stock markets again," said AxiCorp's Stephen Innes.
Innes noted: "A procession of Fed speakers voiced more concerns about the ongoing impasse on additional fiscal stimulus. But it was Fed Vice Chair Clarida that might have delivered the harshest reminder when he noted the 'economy is recovering robustly, but we are still in a deep hole'. Indeed, that stern warning pains even the most bearish eye."
Federal Reserve Chair Jerome Powell warned US lawmakers that the world's largest economy would see a slower recovery should they not push ahead with a fresh rescue package, noting that stimulus cheques and expanded unemployment payments moderated the impact of the virus earlier this year.
Powell reiterated his support for further fiscal stimulus, saying it is "unequalled" by anything else. Congressional stimulus talks have stalled since early August with both political parties about USD1 trillion apart.
Wall Street ended lower Wednesday, with the Dow Jones Industrial Average ending down 1.9%, the S&P 500 down 2.4% and Nasdaq Composite down 3.0%.
In Asia on Thursday, the Japanese Nikkei 225 index is down 1.2%. In China, the Shanghai Composite is down 1.5%, while the Hang Seng index in Hong Kong is down 1.9%.
Against the yen, the dollar was quoted at JPY105.42, firm versus JPY105.30. The euro traded at USD1.1655 early Thursday, lower than USD1.1685 late Wednesday.
Sterling was quoted at USD1.2705 early Thursday, down on USD1.2755 at the London equities close on Wednesday.
The UK on Wednesday reported 6,178 new coronavirus cases, a marked jump in the daily infection rate that comes a day after Prime Minister Boris Johnson unveiled new nationwide restrictions.
It follows a rise of 4,926 the day before, and brings the total confirmed cases in Britain since the pandemic hit earlier this year to 409,729. With a further 37 deaths reported in the past 24 hours, 41,862 people in Britain who tested positive for the virus have now died – the highest toll in Europe.
On Tuesday, Johnson set out plans to close pubs early and reverse previous guidance that people should go back to the office, warning the country was at "a perilous turning point".
Many MPs are pushing the government to extend its furlough scheme that at its peak in May covered the wages of 8.9 million workers who might otherwise have lost their jobs.
The scheme is due to end in October, and Johnson insisted on Tuesday it could not go on indefinitely. However, there is speculation of new economic support to come, after the prime minister said his government would deliver "further creative and imaginative schemes to keep our economy moving".
Finance minister Rishi Sunak is due to address MPs in the House of Commons on Thursday.
Gold was quoted at USD1,853.61 an ounce early Thursday, lower than USD1,868.00 on Wednesday. Brent oil was trading at USD41.49 a barrel, falling from USD42.16 late Wednesday.
The economic events calendar on Thursday has Germany's Ifo business climate at 0900 BST and the latest US jobless claims figures at 1330 BST.
The UK corporate calendar on Thursday has annual results from engineer Smiths Group and transport provider Go-Ahead Group. There are also interim results from multiplex chain Cineworld Group.
By Lucy Heming; lucyheming@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.