(Alliance News) - Stocks in London are set to edge higher on Thursday, as the pound advanced after a cooler-than-expected US inflation print.

IG says futures indicate the FTSE 100 to open up 5.1 points at 7,421.21 on Thursday. The index of London large-caps closed up 133.59 points, 1.8%, at 7,416.11 on Wednesday.

The latest UK economic growth data is due shortly. In May, gross domestic product is expected to contract by 0.3%, according to FXStreet-cited consensus. It had expanded by 0.2% in April.

"The weak performance in May is likely to act as a sizeable drag on Q2 GDP, although we should see some of that recovered in June," said CMC Markets' Michael Hewson.

In the US on Wednesday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.3%, the S&P 500 up 0.7% and the Nasdaq Composite up 1.2%.

US inflation eased slightly more than anticipated in June, according to the latest figures from the Bureau of Labor Statistics.

The consumer price index rose 3.0% on an annual basis in June, cooling from a 4.0% rise in May, and undershooting market consensus of a 3.1% rise.

"The nature of yesterday's numbers suggest that whatever other [Federal Reserve] officials would have us believe in the context of their current hawkishness, further rate hikes beyond this month will be a big ask, and probably won't happen, hence the weakness seen in both the US dollar, and US yields seen so far this week," said CMC's Hewson.

Sterling was quoted at USD1.3009 early Thursday, higher than USD1.2994 at the London equities close on Wednesday.

The euro traded at USD1.1142, higher than USD1.1119. Against the yen, the dollar was quoted at JPY138.61, up versus JPY.138.38.

Equities in Asia also got a boost from the US inflation print, despite data showing a slump in Chinese exports.

The Nikkei 225 index in Tokyo was up 1.5%. In China, the Shanghai Composite was up 1.2%, while the Hang Seng index in Hong Kong jumped 2.6%. The S&P/ASX 200 in Sydney was up 1.6%.

Chinese exports tumbled 12.4% year-on-year in June, official data showed, marking the second successive decline and the latest sign the country's economic recovery is flagging. Imports also fell 6.8% over the same period, according to China's General Administration of Customs.

Exports are a key pillar of growth in the world's second-largest economy but apart from a brief rebound in March and April, they have declined since October 2022.

Still, while June's drop was sharper than the previous month's, the figures were better than the 15.3% fall predicted in a survey of economists by Bloomberg.

Gold was quoted at USD1,957.25 an ounce early Thursday, higher than USD1,954.01 on Wednesday.

Brent oil was trading at USD80.32 a barrel, higher than USD79.93.

In Thursday's UK corporate calendar, housebuilder Barratt Developments and credit checking firm Experian will publish trading statements.

The economic calendar for Thursday has the UK GDP reading at 0700 BST, before US PPI data and the latest jobless claims reading at 1330 BST. Minutes from the European Central Bank's latest meeting are released at 1230 BST.

By Elizabeth Winter, Alliance News senior markets reporter

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