Stocks called up ahead of US CPI reading

(Alliance News) - Stocks in London are set to open higher on Wednesday, ahead of an important inflation reading from the US.

IG says futures indicate the FTSE 100 to open up 42.01 points, or 0.5%, at 7,976.80 on Wednesday. The index of London large-caps closed down 8.68 points, 0.1%, at 7,934.79 on Tuesday.

In the US on Tuesday, Wall Street ended mixed, with investors shaking of nerves ahead of the reading. The Dow Jones Industrial Average closed down slightly, whilst the S&P 500 was up 0.1% and the Nasdaq Composite up 0.3%.

Wednesday's US inflation data is expected to show the rate of year-on-year consumer price growth picked up to 3.4% last month, from 3.2% in February, according to FXStreet cited consensus.

If the rate of consumer price inflation picks up by more than expected, it could mean the Federal Reserve will re-think its interest rate outlook. In its last set of economic projections, the dot-plot showed three rate cuts were still the best bet for 2023.

"There's a palpable sense of nervousness among investors as they exercise a modicum of restraint, concerned about the possibility of hotter-than-expected inflation figures. Such data could spark intense speculation, potentially shifting market expectations towards a scenario where the Federal Reserve refrains from implementing rate cuts in 2024. At the very least, it might dampen expectations regarding the magnitude of future rate cuts this year," said SPI Asset Management's Stephen Innes.

Sterling was quoted at USD1.2679 early Wednesday, higher than USD1.2672 at the London equities close on Tuesday.

The euro traded at USD1.0854 early Wednesday, slightly lower than USD1.0856 late Tuesday. Against the yen, the dollar was quoted at JPY151.79, up versus JPY151.65.

In Asia on Wednesday, the Nikkei 225 index in Tokyo was down 0.3%. In China, the Shanghai Composite was down 0.6%, while the Hang Seng index in Hong Kong was up 2.0%. The S&P/ASX 200 in Sydney closed up 0.3%.

Gold was quoted at USD2,359.22 an ounce early Wednesday, higher than USD2,347.44 on Tuesday. Gold hit a new record high earlier Tuesday, above USD2,365 per ounce, before easing back.

Brent oil was trading at USD89.52 a barrel early Wednesday, lower than USD89.82 late Tuesday.

"Oil fell early today with hope that the conflict in the Middle East will calm down with progress in the ceasefire negotiations in Gaza," said Samer Hasn at XS.com.

Wednesday's economic calendar has the US inflation reading and Fed minutes at 1330 BST and 1900 BST.

The UK corporate calendar has annual results from grocer Tesco.

By Sophie Rose, Alliance News senior reporter

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