(Alliance News) - Stocks in London were set to open higher on Monday, starting the second half of 2023 on stronger footing, as global market risk sentiment was boosted by Friday's US inflation print.

IG says futures indicate the FTSE 100 to open up 29.7 points, 0.4%, at 7,561.23 on Monday. The index of London large-caps added 59.84 points, 0.8%, to 7,531.53 on Friday.

Having spiked to a record high over 8,000 points in February, the FTSE 100 has since retreated and stands virtually unchanged from where it started the year.

"Of all the major indices, its greater weighting towards banks and commodities has seen it underperform, largely due to the weakness of the rebound in the Chinese economy, and the fall in oil and gas prices," noted CMC Markets' Michael Hewson.

"The FTSE 100 aside, what has been surprising is that, aside from a couple of exceptions, the stock market gains of the last few months have given few signs of disappearing despite interest rates that are significantly higher than they were at the start of the year, with little sign that they will come down any time soon," Hewson added.

In the US on Friday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.8%, the S&P 500 up 1.2% and the Nasdaq Composite up 1.5%. Sentiment was lifted by a cooler-than-expected US inflation print, which boosted hopes that the Federal Reserve's rate-rising spree might be close to an end.

Despite the Fed's rate hikes, the Dow is up nearly 4% so far in 2023.

The dollar was little changed against major currencies in early exchanges in Europe on Monday.

Sterling was quoted at USD1.2703, slightly lower than USD1.2706 at the London equities close on Friday. The euro traded at USD1.0918, edging up from USD1.0916. Against the yen, the dollar was quoted at JPY144.39, lower versus JPY144.58.

In Asia on Monday, markets took their cue from the strong performance on Wall Street, despite some mixed economic data for the region.

The Nikkei 225 index in Tokyo was up 1.7%. In China, the Shanghai Composite was up 1.3%, while the Hang Seng index in Hong Kong was up 1.8%. The S&P/ASX 200 in Sydney was up 0.6%.

Early economic data pointed towards a slowdown in Asian manufacturing.

The Caixin purchasing managers' index for China's manufacturing indicated marginal growth in June, albeit at a slower pace than in May.

Meanwhile, the au Jibun Bank PMI for Japan showed its manufacturing sector slipped back into a slight contraction. Respondents in Japan noted especially weak demand from mainland China, with exports orders continuing to fall.

Gold was quoted at USD1,919.99 an ounce early Monday, higher than USD1,915.48 on Friday. Brent oil was trading at USD75.37 a barrel, little changed from USD75.58.

There are more manufacturing PMI readings to come, including the eurozone at 0900 BST, the UK at 0930 BST and the US at 1445 BST. Financial markets in New York close at 1300 local time on Monday for Independence Day. They stay closed on Tuesday for the public holiday.

The week picks up speed on Wednesday with services PMI readings from across the globe and the latest US nonfarm payrolls on Friday.

Monday's UK corporate calendar has half-year results from filtration technology firm Porvair.

By Elizabeth Winter, Alliance News senior markets reporter

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