MARKET COMMENT: London Seen Lower Ahead Of ECB And BoE Rate Decisions

LONDON (Alliance News) - London shares are set to open lower Thursday, as investors look forward to ECB President Mario Draghi outlining details of the central bank's planned government bond-buying programme, while also awaiting the Bank of England's rate decision announcement.

"On the subject of stimulus, the focus today will be on two central banks, the Bank of England, who are expected to do keep rates unchanged for the 72nd month in a row, and the ECB who are having their latest meeting in Cyprus", says Michael Hewson, chief market analyst at CMC Markets.

"The main focus will be on not only the form of assets the ECB intends to buy, but also on the updating of the growth and inflation forecasts, as these could give clues as to the timeframe of any QE program," Hewson writes.

China's Premier Li Keqiang on Thursday lowered the growth target for China this year to "approximately 7%." Li's speech outlined a government work report on the country's key economic policies for this year. He said China faces challenges including sluggish investment growth, falling prices on manufactured products and an "inefficient" growth model, coupled with problems of overcapacity and lack of innovation.

IG futures indicate the FTSE 100 to open 12 points lower at 6,907.5. The index closed up 0.4% at 6,919.24 on Wednesday, after a late rally that was emulated in Europe's main equity indices, snapping a three-day losing streak amid a continued focus on full-year earnings from a large number of companies, including ITV and Standard Chartered.

Also Wednesday FTSE confirmed Hikma Pharma replacing Tullow Oil in FTSE 100, while said AA, Virgin Money and Imagination Technologies will replace Afren, GAME Digital and Oxford Instruments. These changes will take effect from the market open on Monday, March 23, following completion of its quarterly review.

Wall Street ended lower Wednesday. The DJIA closed down 0.6%, the S&P 500 ended down 0.4% and the Nasdaq Composite finished down 0.3%.

In Asia on Thursday, the Japanese Nikkei 225 closed up 0.3%, and the Hang Seng trades down 1.1%. The Shanghai Composite is trading down 1.1%.

Brent crude is quoted at around USD60.64 a barrel Thursday, and US benchmark West Texas Intermediate is quoted at USD51.83 a barrel. Gold is quoted early Thursday at USD1,202.59 an ounce.

In the corporate calendar Thursday, Aggreko, Schroders, Aviva, London Stock Exchange Group, Friends Life Group, Inmarsat, CSR, H&T Group, Cobham, Admiral Group, Spirax-Sarco Engineering and Hunting release full-year results. Betfair Group issues an interim management statement. Easyjet gives its traffic statistics for February.

In the economic calendar, German factory orders are at 0700 GMT, while Italy's GDP is at 0900 GMT. The Bank of England releases its interest rate decision at 1200 GMT, while the ECB follows at 1245 GMT. In the US, initial jobless claims data is at 1330 GMT, while factory orders are at 1500 GMT.

By Daniel Ruiz; danielruiz@alliancenews.com

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