LONDON (Alliance News) - UK stocks are set to open higher Tuesday following a strong session on Wall Street and gains made in Europe on Monday on the back of European Central Bank President Mario Draghi's uncharacteristically doveish remarks at the Jackson Hole symposium on Friday.
Futures indicate that the FTSE 100 will open marginally higher at 6,807.8. The FTSE 100 closed at 6,775.25 on Friday. The London market was closed on Monday.
European markets ended Monday significantly higher with the CAC 40 in Paris gaining 2.1%, while the DAX rose by 1.8%.
The DJIA ended trading up 0.4%, the S&P 500 ended up 0.5%, while the NASDAQ Composite ended down 0.1%
Asian stocks, however, are experiencing a poor trading session Tuesday, with the Nikkei closing 0.5% down while the Hang Seng trades down 0.2% and the SSE Composite down 0.8%.
Draghi's speech on Friday evening in the US prompted European markets to rally on Monday as he said the ECB will carry out quantitative easing unless inflation picks up. Draghi said he is confident that the package of stimulus measures announced in June by the central bank will provide the intended boost to demand, but the ECB stands ready to adjust its policy stance further if required.
"The unexpectedly doveish speech from Mario Draghi late on Friday caught the markets off-guard somewhat, meaning that we have only started seeing the effects in the early part of this week," says Joshua Mahony, an analyst at Alpari.
Meanwhile, US markets soared to record highs as the S&P 500 surpassed 2,000 for the first time after Federal Reserve Chair Janet Yellen gave little indication in her own speech at Jackson Hole of when interest rates will rise.
However, geopolitical tensions in eastern Ukraine will remain in the minds of investors as they continue to be an underlying concern.
"Geopolitical concerns remain in the background for now, but are likely to remain a worry as Ukraine President Poroshenko meets Russian President Putin in Minsk [Tuesday] for talks aimed at bringing to end the conflict between the separatists and the Ukraine government. Expectations remain low as to any successful outcome here," says CMC Markets' chief market analyst Michael Hewson.
In individual stock news, a host of interim results have been released from FTSE 100-listed companies, including Petrofac, Bunzl, and WPP.
After last week's central bank events the economic calendar is relatively quiet. On Tuesday at 0930 BST UK BBA mortgage approval data will be released, while US economic results will dominate the remainder of the day, the highlights being durable good orders at 1330 BST and US consumer confidence at 1500 BST.
By Neil Thakrar; neilthakrar@alliancenews.com
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Petrofac (PFC)
Bunzl (BNZL)
WPP (WPP)