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CATEGORY: MARKET REPORT - PRE-OPEN

London pre-open: Stocks to rise ahead of manufacturing data

Mon 03 Feb 2020

LONDON (SHARECAST) - (Sharecast News) - London stocks were set to rise at the open on Monday despite tumbling Chinese equities, as investors eyed the release of the latest UK manufacturing data.
The FTSE 100 was called to open 17 points higher at 7,303.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "Stocks in China nosedived 9% at the open as traders returned from a week-long Lunar Year break. The yuan fell past 7 against the US dollar, copper and iron tanked by the daily limit. The death toll due to the coronavirus rose to 360, more than 17,000 are said to be infected.

"The People's Bank of China (PBoC) cut the funding rate by 10 basis points and injected cash into the system in an effort to slow down the race to the bottom. Targeted measures may have eased some of the pressure, but given the size of the sell-off, there was little authorities could do anyway.

"In the coming days, China will likely unleash other measures gradually to contain the panic in the market.

"Now, it is worth noting that markets have opened but many Chinese businesses will not return before another week. Hence, one thing is sure, the Chinese economy will be heavily hit in the first quarter; growth could fall as low as 4.5% according to Bloomberg. As an early indication, the Caixin PMI showed that the Chinese manufacturing grew at its slowest pace in five months in January."

Still, sessions elsewhere in Asia were much more muted and stocks in London looked set to avoid another selloff after falling to a seven-week low on Friday.

On the data front, all eyes will be on the UK manufacturing PMI at 0930 GMT.

In corporate news, Imperial Brands said it had appointed Inchcape chief executive Stefan Bomhard to its top job, replacing Alison Cooper who stepped down on Monday with immediate effect.

Magazine and media company Future updated the market on its trading for the four-month period ended 31 January , reporting that it had continued to see "strong momentum" in the year-to-date, growing its audience numbers within the media division.

The company said that underpinned "strong" organic revenue growth, which together with improved conversion of higher margin revenues in both e-commerce and digital display advertising, was benefitting its trading results.

It said it now expected the outcome for the full year to be "materially ahead" of current market expectations, despite some uncertainty in the macro-economic environment.
 
Archived Stories

27 Mar London pre-open: Stocks seen lower as caution sets in ahead of weekend
26 Mar London pre-open: Stocks seen lower ahead of jobless claims, BoE
25 Mar London pre-open: Stocks to rise on US stimulus news
24 Mar London pre-open: Stocks seen up on positive Asian cues
23 Mar London pre-open: Stocks seen sharply lower amid pandemic concerns



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