(Alliance News) - Stocks in London are set to open lower on Friday, despite a Christmas rally over on Wall Street, as investors nervously look ahead to a key US inflation reading.

Markets in London will shut at 1230 GMT on Friday, marking the start of Christmas celebrations. They will then be shut on Monday and Tuesday for Christmas Day and Boxing Day.

IG says futures indicate the FTSE 100 is likely to open down 17.4 points, 0.2%, at 7,677.33 on Friday. The index of London large-caps closed down 20.95 points, 0.3%, at 7,694.73 on Thursday.

In the US on Thursday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.9%, the S&P 500 up 1.0% and the Nasdaq Composite up 1.3%.

Investors are keeping an eye on a key US personal consumption expenditures price index print on Friday. It is the Federal Reserve's preferred metric of inflation.

According to FXStreet, the core PCE index is expected to cool to 3.3% in November year-on-year, from 3.5% in October. The core reading, the Fed's preferred inflation gauge, does not include food or energy.

Last week, the Federal Open Market Committee extended a pause in monetary policy that has been in place since July, leaving the federal funds rate at a 22-year high of 5.25% to 5.5%. At the time, Federal Reserve Chair Jerome Powell said that while interest rates "are at or near the peak of the cycle", the committee "has been surprised before and will do more if needed to bring inflation down".

Sterling was quoted at USD1.2686 early Friday, lower than USD1.2734 at the London equities close on Thursday. The euro traded at USD1.0997 early Friday, higher than USD1.0988 late Thursday. Against the yen, the dollar was quoted at JPY142.25, down versus JPY142.35.

In Asia on Friday, the Nikkei 225 index in Tokyo was up 0.1%.

Japanese consumer inflation slowed to 2.5% year-on-year in November from 2.9% the previous month, as electricity and gas bills declined, government data showed Friday.

The figure for the world's third-largest economy, which excludes volatile fresh food prices, was in line with market expectations in a Bloomberg survey.

The data comes after the Bank of Japan earlier this week maintained its long-standing, ultra-loose monetary policy and offered no guidance on its plans for the new year, sending the yen down against the dollar and boosting stocks.

The S&P/ASX 200 in Sydney closed down marginally. In China, the Shanghai Composite was down 0.3%, while the Hang Seng index in Hong Kong was down 1.7%.

Shares in Shenzhen-based technology and entertainment conglomerate Tencent were down 15% in Hong Kong.

China on Friday announced new plans to restrict the online gaming industry by limiting in-game purchases and compulsive playing behaviour.

The regulations would introduce limits on recharging in-game wallets and abolish features meant to increase gameplay time such as rewards for daily log-ins, a draft published online by the regulator showed.

Gold was quoted at USD2,047.22 an ounce early Friday, higher than USD2,040.66 on Thursday. Brent oil was trading at USD80.01 a barrel early Friday, higher than USD79.05 late Thursday.

In Friday's UK corporate calendar, Cellular Goods will publish its full year results. There will also be a trading statement from M&C Saatchi.

The economic calendar for Friday has UK retail sales at 0700 GMT, before markets shut at 1230 GMT.

By Sophie Rose, Alliance News senior reporter

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