(Alliance News) - Stocks in London are set to open lower on Thursday, while stocks across the globe struggle as US Treasury yields push to fresh highs, and concerns rise about a wider conflict in the Middle East.
IG says futures indicate the FTSE 100 to open will open down 26.5 points, 0.4%, at 7,561.5 on Thursday. The index of London large-caps closed down 87.21 points, 1.1%, at 7,588.00 on Friday.
In the US on Friday, Wall Street ended lower, with the Dow Jones Industrial Average down 1.0%, the S&P 500 down 1.3%, and the Nasdaq Composite down 1.6%.
In Asia on Thursday, the Nikkei 225 index in Tokyo was down 1.7%. In China, the Shanghai Composite was down 1.2%, while the Hang Seng index in Hong Kong was down 2.0%. The S&P/ASX 200 in Sydney closed down 1.4%.
US President Joe Biden on Wednesday delivered full US backing for Israel in person, on a solidarity visit in which he blamed Islamist militants for a deadly rocket strike on a Gaza hospital and announced the resumption of urgent aid to the besieged Palestinian enclave. Biden will deliver a primetime speech about the conflicts in Israel and Ukraine on Thursday evening in the US.
UK Prime Minister Rishi Sunak is expected in Israel this morning, to meet his counterpart Benjamin Netanyahu and Israeli President Isaac Herzog. His Foreign Secretary James Cleverly is due to visit Egypt, Turkey and Qatar "in the coming days", according to Downing Street.
Meanwhile, Chinese President Xi Jinping told Egypt's prime minister that Beijing hoped to work with his country to bring "more stability" to the Middle East, Chinese state media reported.
Iranian President Ebrahim Raisi called on the Islamic world to break off relations with Israel, in view of the war in the Middle East. Islamic states should expel Israeli ambassadors and close their missions, Raisi demanded during a speech in Tehran.
Iran has also warned of a possible pre-emptive strike and called for an oil embargo.
"With Iran calling for an oil embargo the temperature is slowly being dialled higher, with the region becoming even more of a tinderbox," said CMC Markets' Michael Hewson.
"Markets are also having to contend with rising US rates ahead of the upcoming Fed meeting, with US long term rates rising to fresh 16-year highs across the curve, in expectation that rates could well stay high for a lot longer. The US 30-year yield has been a notable mover this week touching 5% for the first time since August 2007, while US mortgage rates rose to 8%," he continued.
Sterling was quoted at USD1.2126 early Thursday, dropping lower than USD1.2151 at the London equities close on Friday. The euro traded at USD1.0535, little changed from USD1.0533. Against the yen, the dollar was quoted at JPY149.81, down a touch versus JPY149.86.
Gold was quoted at USD1,948.84 an ounce early Thursday, higher than USD1,941.78 on Friday.
Brent oil was trading at USD91.12 a barrel, little changed from USD91.10.
Thursday's economic calendar has the latest US jobless claims data at 1330 BST, and remarks from various Federal Reserve officials, including the central bank's chair, Jerome Powell.
The local corporate calendar has trading statements from home furnishings retailer Dunelm, stock exchange operator London Stock Exchange Group and investment manager Schroders.
By Elizabeth Winter, Alliance News senior markets reporter
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