(Alliance News) - Stocks in London are set to open lower on Friday, as earnings continue to stream in, and a week of central bank decisions comes to an end.
IG says futures indicate the FTSE 100 to open down 20.5 points, 0.3%, at 7,672.26 on Friday. The index of London large-caps rose 15.87 points, 0.2% at 7,692.76 on Thursday.
"European markets saw a strong session yesterday, buoyed by the belief that the central banks could be done when it comes to further rate hikes, after the [European Central Bank] followed the [Federal Reserve] by raising rates by 25 basis points and then suggesting that a pause might be on the table when they next meet in September," said CMC Markets' Michael Hewson.
Sterling was quoted at USD1.2781 early Friday, down from USD1.2865 at the London equities close on Thursday. The euro traded at USD1.0961, lower than USD1.0996.
"The mood was also helped by a strong set of US economic numbers which pointed to a goldilocks scenario for the US economy," Hewson continued.
Equities had earlier made a bright start after figures showed the US economy grew by more than expected in the second quarter of 2023, according to the first estimate from the US Bureau of Economic Analysis.
Quarter-on-quarter gross domestic product in the US increased 2.4% on an annualised basis in the second quarter of the year. In the first quarter, real GDP increased 2.0%, showing that the US economy has gathered some momentum.
Nevertheless, the Dow snapped a 13-day winning streak after regulators announced tougher rules for US banks.
In the US on Thursday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.7%, the S&P 500 down 0.6% and the Nasdaq Composite down 0.6%.
In Asia on Friday, the Nikkei 225 index in Tokyo was down 1.5%, as the yen strengthened following a policy adjustment from Japan's central bank.
The Bank of Japan said it will allow "greater flexibility" in controlling bond yields, as it raised its full-year inflation forecast to 2.5% from its previous estimate of 1.8%.
It said it would continue to allow 10-year JGB yields to "fluctuate in the range of around plus and minus 0.5 percentage points from the target level, while it will conduct yield curve control with greater flexibility regarding the upper and lower bounds of the range as references, not as rigid limits," the central bank said in a statement. The bank also kept its short-term interest rate target unchanged at -0.1%.
Against the yen, the dollar was quoted at JPY138.92, down versus JPY141.07.
In China, the Shanghai Composite was 1.7%, while the Hang Seng index in Hong Kong was up 1.3%. The S&P/ASX 200 in Sydney was down 0.8%.
Gold was quoted at USD1,953.18 an ounce early Friday, higher than USD1,944.93 on Thursday. Brent oil was trading at USD83.76 a barrel, edging up from USD83.59.
Friday's economic calendar has a German GDP reading at 0900 BST and an inflation reading from the eurozone's largest economy at 1300 BST. There is a US personal consumption expenditures reading at 1330 BST.
On the corporate calendar, there are half-year results from AstraZeneca, NatWest and International Consolidated Airlines Group.
By Elizabeth Winter, Alliance News senior markets reporter
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