FTSE 100 called higher ahead of US inflation

(Alliance News) - Stocks in London are called to open higher on Thursday, though shares in Asia showed signs of pre-US inflation caution as a rally there lost impetus as the afternoon wore on.

IG says futures indicate the FTSE 100 index of large-caps to open 22.3 points, 0.3%, higher at 7,747,28 on Thursday. The blue-chip benchmark had closed up 30.49 points, or 0.4% at 7,724.98 on Wednesday.

In Asia on Thursday, stocks were mixed. The Shanghai Composite was 0.1% higher in afternoon dealings, while the Hang Seng in Hong Kong was flat after surrendering earlier gains. In Tokyo, the Nikkei 225 closed flat, having also traded higher in early dealings. The S&P/ASX 200 closed up 1.2%.

Stocks in New York closed higher. The Dow Jones Industrial Average rose 0.8%, the S&P 500 jumped 1.3% and the Nasdaq Composite rallied 1.8%.

All eyes are on a US consumer price index report at 1330 GMT, with numbers expected to show annual inflation ebbed to 6.5% in December from 7.1% in November.

"Still high, but way off the peak of 9.1% back in June last year. Core rates are also expected to decline and should fall to 5.7% from 6.0%. If we get these outcomes or more, then we would anticipate risk assets rallying and the [dollar] weakening," analysts at ING commented.

Ahead of the data, the greenback was weaker.

The pound rose to USD1.2145 on Thursday morning in London, from USD1.2125 at the time of the London equities close on Wednesday. The euro edged up slightly to USD1.0761 from USD1.0758. Against the yen, the dollar faded to JPY131.63 from JPY132.57.

Already out, China's consumer price inflation picked up modestly in December, though it remains below target.

The consumer price index rose 1.8% from a year before, quickening from a 1.6% annual rise in November, the National Bureau of Statistics said.

Inflation for the whole of 2022 rose by an average of 2%, making China an outlier compared with other major economies, where prices have been driven higher by energy and food costs and by supply chain snarls.

Beijing had targeted an average inflation rate of 3% for 2022, and the lower figure will give authorities room to provide much-needed stimulus to the economy.

A barrel of Brent oil fetched USD82.70 on Thursday morning London time, up from USD81.43 late Wednesday. Gold traded at USD1,883.26 an ounce, up from USD1,872.57.

In Thursday's UK corporate calendar, there's trading statements from grocer Tesco, clothing, homewares and food seller Masks & Spencer, and online-only fashion retailer Asos.

In the economic calendar, alongside the keenly-awaited inflation data, there is also the US weekly unemployment insurance claims reading at 1330 GMT.

By Eric Cunha, Alliance News news editor

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