LONDON (Alliance News) - London stocks are set to start lower Wednesday, hurt by renewed concerns over the global economy after the World Bank forecast sluggish growth in Europe.
The FTSE 100 is called to open 84 points lower at 6,458. The index closed Tuesday at 6,452.2, up 0.6%, but the Dow Jones Industrial Average closed down 0.2%.
The World Bank said the global economy is forecast to grow moderately this year, citing stronger growth in the US and Britain but weakness in the eurozone and Japan. "The forecast for Euro Area growth is a sluggish 1.1% in 2015, rising to 1.6% in 2016-17," the World Bank said, cutting its 2015 forecast from 1.8% previously.
Brent crude is quoted at around USD45.85 a barrel after touching a new six-year low of USD45.16 during Tuesday's session, fuelling concerns about global growth and reflecting a increase in supply. US benchmark West Texas Intermediate was quoted at USD45.40.
"While the continued weakness in oil prices is welcome at the consumer level, the current weakness is starting to raise concerns that it could usher in a situation that causes some unwelcome side effects elsewhere in the global economy as oil producers start to feel the pinch of lower prices on their margins," says Michael Hewson at CMC Markets.
The fate of the European Central Bank's government bond-buying programme could be decided Wednesday, when Europe's top court issues an opinion on the legitimacy of the scheme.
One of the advocates-general of the European Court of Justice, Pedro Cruz Villalon, is to release a non-binding interim position on the ECB's so-called Outright Monetary Transactions programme, which was unveiled at the height of the euro debt crisis in 2012 but has never been activated.
French December inflation data and eurozone November industrial production are due at 0745 GMT and 1000 GMT, respectively, followed by US December retail sales at 1330 GMT.
In UK corporate news, fashion house Burberry has released its third-quarter trading statement, Barratt Developments gives an update covering its performance in the six months to the end of 2014 and online supermarket provides a report on Christmas trading.
Japan's Nikkei closed down 1.7% at 16,795.96. The Hang Seng in Hong Kong is down 0.6% at 24,070.37 and the Shanghai Composite is down 1.3% at 3,197.832.
By Ian Edmondson; ianedmondson@alliancenews.com
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Burberry (BRBY)
Ocado (OCDO)
Barratt Developments (BDEV)