FTSE 100 to make little progress after gains

(Alliance News) - Stocks in London are set to open flat on Thursday, as the rally fuelled by waning inflation data from the US and UK fizzles out.

IG says futures indicate the FTSE 100 is set to open down 1.5 points at 7,485.41 on Thursday. The index of London large-caps closed up 46.44 points, 0.6%, at 7,486.91 on Wednesday.

On Wednesday, annual US producer price growth was weaker than expected, while separate numbers showed retail sales were better than forecast.

According to the Census Bureau, US retail sales fell 0.1% in October from September. It was better than the 0.3% decline that was forecast, according to FXStreet-cited consensus.

"The soft PPI reading has the potential to magnify the message conveyed by [Tuesday's cooler-than-expected] consumer price index report. The suggestion is that disinflation might be in the pipeline, or that's how overly enthusiastic market participants will likely interpret the message," said SPI Asset Management's Stephen Innes.

"Taken together, the retail sales report and the PPI figures were highly accommodating to a Goldilocks interpretation, although after Tuesday's fireworks, it may already be in the price."

The dollar was stronger in early transactions in Europe.

Sterling was quoted at USD1.2369 early Thursday, lower than USD1.2448 at the London equities close on Wednesday. The euro traded at USD1.0841, lower than USD1.0864. Against the yen, the dollar was quoted at JPY151.35, up versus JPY150.91.

In the US on Wednesday, Wall Street ended in the green, with the Dow Jones Industrial Average up 0.5%, the S&P 500 up 0.2% and the Nasdaq Composite up 0.1%.

Investors were also assessing developments on the geopolitical front, as the leaders of the world's two largest economies met in San Francisco.

US President Joe Biden and Chinese President Xi Jinping agreed to restore military communications at their first summit in a year, even as Biden went off script by saying he still considered Xi a "dictator".

The leaders shook hands and strolled in a garden at a historic California estate during four-hour talks aimed at preventing growing tensions between the world's largest economies from spiraling into conflict.

They also agreed that China would crack down on the production of ingredients for the drug fentanyl, responsible for a deadly epidemic of opioid abuse in the US. But Xi and Biden remained far apart on the wider flashpoint of Taiwan, with the Chinese president telling his US counterpart to stop arming the island and saying that reunification was "unstoppable."

Meanwhile, the US Congress passed a stop-gap funding bill to keep federal agencies running for another two months and avert a painful holiday season government shutdown – although the deal leaves out aid to war-torn Ukraine and Israel requested by President Joe Biden.

In Asia on Thursday, the Nikkei 225 index in Tokyo closed down 0.3%. In China, the Shanghai Composite was down 0.5%, while the Hang Seng index in Hong Kong was down 1.0%. The S&P/ASX 200 in Sydney closed down 0.7%.

Gold was quoted at USD1,964.99 an ounce early Thursday, slightly higher than USD1,962.09 on Wednesday.

Brent oil was trading at USD80.71 a barrel, lower than USD81.59.

Thursday's economic calendar has the latest US jobless claims reading and an industrial production report from the world's largest economy at 1330 GMT and 1415 GMT.

The UK corporate calendar has half-year results from luxury retailer Burberry and pub firm Young & Co's, as well as trading statements from insurer Aviva and aerospace company Melrose Industries.

Over in New York, focus will once again turn to the US consumer, as Walmart releases third-quarter results.

By Elizabeth Winter, Alliance News senior markets reporter

Comments and questions to [e-mail]

Copyright 2023 Alliance News Ltd. All Rights Reserved.