LONDON MARKET EARLY CALL: Asia tumbles, FTSE 100 called lower

(Alliance News) - London's FTSE 100 is called to open lower on Wednesday, as investor anxiously ...

Alliance News 11 September, 2024 | 5:53AM
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(Alliance News) - London's FTSE 100 is called to open lower on Wednesday, as investor anxiously await US inflation data in the afternoon, following a UK gross domestic product reading in the morning.

"Today's CPI figure will be an important test for the nascent equity market rally, particularly if a cooler-than-expected print again leads markets to desire more easing than is likely to be delivered, at least in the short-term, with a 25bp cut at the September FOMC still the most likely outcome," Pepperstone analyst Michael Brown commented.

IG says futures indicate the FTSE 100 to open 22.9 points lower, 0.3%, at 8,183.08 on Wednesday. The index of London large-caps 64.86 points, or 0.8%, at 8,205.98 on Tuesday.

In Tokyo, the Nikkei 225 slid 2.3%. In China, the Shanghai Composite fell 1.0%, while the Hang Seng in Hong Kong was down 1.4%. In Sydney, the S&P/ASX 200 was 0.5% lower.

The pound was quoted at USD1.3108 early Wednesday, rising from USD1.3060 at the London equities close on Tuesday. The euro stood at USD1.1048, up from USD1.1021. Against the yen, the dollar was trading at JPY141.13, down from JPY142.55.

Brent oil was quoted at USD69.74 a barrel, rising from USD69.20 but remaining below USD70. Gold climbed to USD2,520.11 an ounce from USD2,515.08.

Oil price weakness is something the Federal Reserve may have to factor in its decision making, SPI Asset Management analyst Stephen Innes commented.

"The big question is whether these price declines should be read as a sign of doom and gloom. One thing's for sure: the Fed might want to take a closer look at the collapse in oil prices. It's a clear sign of disinflationary pressures building in the system. Yes, oil can be unpredictable, but that volatility could be the perfect justification for a 50-basis-point cut," Innes commented.

Wednesday's economic calendar has the UK gross domestic product figure at 0700 BST, before the US consumer price inflation print at 1330 BST.

Data is expected to show the rate of annual US consumer price inflation faded to 2.6% in August, from 2.9% in July.

The UK economy is predicted to have grown 0.2% in July from June, according to consensus cited by FXStreet.

The local corporate calendar has a trading statement from travel operator and retailer WH Smith, and results from home furnishings retailer Dunelm and consumer reviewing platform, Trustpilot.

Kamala Harris went on the offensive against Donald Trump in a fiery televised debate Tuesday, getting under her rival's skin as they battled for a breakthrough in an agonizingly close election.

In a performance that earned her the endorsement of pop superstar Taylor Swift, the Democrat clashed with the "extreme" Republican on hot-button issues from abortion to democracy and accused him of being a friend to dictators.

Pepperstone analyst Chris Weston commented: "This debate was never going to be an exercise in digging deep into the weeds and into the granularity of the respective policies, and we're certainly not significantly wiser on that front. However, the undecided voters wanted to see how presidential Harris appeared and sounded and if she could be the strong leader that is needed for the position in question. I won't give a view on the outcome of that focus, as I don't have a dog in this fight, but the wash-up is the prediction markets and betting exchanges have seen Harris's odds of becoming president moving up 2 to 3ppt and have now have her slightly favoured."

By Eric Cunha, Alliance News news editor

Comments and questions to newsroom@alliancenews.com

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