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LONDON MARKET EARLY CALL: Stocks called up as China eases Covid rules

12/07/2022 | 02:00am EST

(Alliance News) - Stocks in London are set to open higher on Wednesday, as China announced a nationwide loosening of its strict zero-Covid measures.

IG says futures indicate the FTSE 100 index of large-caps to open up 18.7 points, 0.3%, at 7,540.09 on Wednesday. The FTSE 100 index ended down 46.15 points, or 0.6%, at 7,521.39 on Tuesday.

The dollar was stronger since the European equities close.

Sterling was quoted at USD1.2117 early Wednesday, lower than USD1.2243 on Tuesday. The euro traded at USD1.0452 early Wednesday, lower than USD1.0519 late Tuesday. Against the yen, the dollar was quoted at JPY137.80, up versus JPY136.46.

In the US on Tuesday, Wall Street ended lower, with the Dow Jones Industrial Average ending down 1.0%, the S&P 500 down 1.4%, and the Nasdaq Composite down 2.0%.

"While US markets finished lower for the fourth day in succession oil prices also fell sharply over concerns that a stickier inflation outlook increases the prospect of a weaker economy heading into 2023," said CMC Markets' Michael Hewson.

Brent oil was trading at USD79.42 a barrel early Wednesday, lower than USD80.35 late Tuesday.

The price of Brent crude fell below the symbolic level of USD80 per barrel on Tuesday for the first time since January, when prices began to rise ahead of the Russian invasion of Ukraine.

In Asia on Wednesday, the Japanese Nikkei 225 index was down 0.7%. In China, the Shanghai Composite was down 0.5%, while the Hang Seng index in Hong Kong was down 0.8%. The S&P/ASX 200 in Sydney closed down 0.9%. 

"Asia markets have been mixed today with the latest China trade data pointing to the damage the country's zero-Covid strategy is doing to its economy," Hewson commented.

China's imports and exports plunged in November to levels not seen since early 2020, according to official figures released Wednesday. 

Beijing's zero-Covid policy of snap lockdowns, travel curbs and daily mass testing has left businesses reeling, disrupted supply chains and damped consumption. 

November imports fell 11% year-on-year, the biggest collapse since May 2020. Exports fell by 8.7% year-on-year, the biggest drop since February 2020, when the country was mired in the early stages of the pandemic. 

However, on Wednesday also came news of a nationwide loosening of Covid restrictions in China, following protests against the hardline strategy that grew into calls for greater political freedoms.

Under the new guidelines, some asymptomatic and mild cases of Covid-19 can now quarantine at home, ending a requirement that all positive cases be isolated in centralised government facilities. 

Gold was quoted at USD1,772.05 an ounce early Wednesday, down slightly from USD1,774.71 on Tuesday.

Wednesday's economic calendar has a Halifax UK house price index reading at 0700 GMT, and a eurozone gross domestic product reading at 1000 GMT.

The local corporate calendar has annual results from pub firm Mitchells & Butlers and a half-year report from greetings card seller Moonpig.

By Elizabeth Winter, senior markets reporter

Comments and questions to newsroom@alliancenews.com

Copyright 2022 Alliance News Ltd. All Rights Reserved.

Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / EURO (AUD/EUR) 0.86% 0.6475 Delayed Quote.0.74%
AUSTRALIAN DOLLAR / JAPANESE YEN (AUD/JPY) -0.38% 91.022 Delayed Quote.2.25%
BRENT OIL 2.94% 83.81 Delayed Quote.-6.97%
BRITISH POUND / EURO (GBP/EUR) 0.21% 1.12261 Delayed Quote.-1.21%
BRITISH POUND / JAPANESE YEN (GBP/JPY) -1.08% 157.815 Delayed Quote.0.25%
BRITISH POUND / US DOLLAR (GBP/USD) 0.02% 1.2025 Delayed Quote.-0.43%
CANADIAN DOLLAR / EURO (CAD/EUR) 0.34% 0.695754 Delayed Quote.0.28%
CANADIAN DOLLAR / JAPANESE YEN (CAD/JPY) -0.86% 97.802 Delayed Quote.1.84%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) 0.24% 0.7453 Delayed Quote.1.04%
DOW JONES INDUSTRIAL 0.62% 34093.63 Real-time Quote.2.24%
EURO / JAPANESE YEN (EUR/JPY) -1.22% 140.573 Delayed Quote.1.51%
EURO / US DOLLAR (EUR/USD) -0.14% 1.07123 Delayed Quote.0.81%
FTSE 100 0.36% 7864.71 Delayed Quote.5.17%
INDIAN RUPEE / EURO (INR/EUR) -0.06% 0.011258 Delayed Quote.-0.20%
INDIAN RUPEE / JAPANESE YEN (INR/JPY) -1.22% 1.583757 Delayed Quote.1.18%
INDIAN RUPEE / US DOLLAR (INR/USD) -0.08% 0.012078 Delayed Quote.0.62%
JAPANESE YEN / SWISS FRANC (JPY/CHF) 0.61% 0.7035 Delayed Quote.-0.48%
MOONPIG GROUP PLC -0.63% 126.9 Delayed Quote.15.78%
MSCI UNITED KINGDOM (STRD) 0.45% 1128.51 Real-time Quote.6.20%
NASDAQ COMPOSITE 1.67% 12083.1 Real-time Quote.13.58%
NEW ZEALAND DOLLAR / JAPANESE YEN (NZD/JPY) -0.99% 82.834 Delayed Quote.0.32%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) 0.10% 0.6311 Delayed Quote.-0.36%
NIKKEI 225 -0.03% 27685.47 Real-time Quote.6.13%
S&P GSCI BRENT CRUDE INDEX 3.37% 712.5285 Real-time Quote.-5.73%
S&P UNITED KINGDOM (PDS) 0.43% 1596.75 Real-time Quote.4.64%
S&P/ASX 200 -0.46% 7504.1 Real-time Quote.7.11%
S&P/CITIC 300 INDEX 0.14% 3744.19 Real-time Quote.5.54%
S&P/CITIC 50 INDEX 0.20% 3592.69 Real-time Quote.4.09%
US DOLLAR / EURO (USD/EUR) 0.14% 0.933524 Delayed Quote.-0.80%
US DOLLAR / JAPANESE YEN (USD/JPY) -1.09% 131.224 Delayed Quote.0.73%
WTI 3.59% 77.465 Delayed Quote.-8.77%
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