(Alliance News) - Stocks in London were set to open higher on Wednesday, after a strong finish for equities in the US on Tuesday on the back of surprisingly resilient economic data for the world's largest economy.
IG says futures indicate the FTSE 100 to open 26.94 points higher, or 0.4%, at 7,488.40 on Wednesday. The FTSE 100 index closed up 7.88 points, 0.1%, at 7,461.46 on Tuesday.
"After 6 days of declines, European markets managed to break their recent losing streak yesterday, closing marginally higher after a day when the direction could have gone either way. The catalyst for the recovery off the day's lows was a strong US session which was driven by two sets of strong US economic numbers," said Michael Hewson, chief market analyst at CMC Markets.
The Dow Jones Industrial Average closed up 0.6%, the S&P 500 up 1.2% and the Nasdaq Composite up 1.7%.
Two sets of better-than-expected economic data improved the mood, with US consumer confidence and new home sales both surprising on the upside.
US consumer confidence surged unexpectedly to an 18-month high in June, fuelled by an uptick in the outlook for family finances, while new home sales in the US reached the highest rate in over a year.
The positive economic indicators helped lift the dollar, which was mostly stronger on Wednesday morning.
Sterling was quoted at USD1.2729 early Wednesday, down from USD1.2748 at the London equities close on Tuesday. The euro traded at USD1.0953, down slightly from USD1.0959 late Tuesday.
Against the yen, however, the dollar was quoted at JPY143.93, lower versus JPY144.01.
In Tokyo on Wednesday, the Nikkei 225 index was up 1.8%. In China, the Shanghai Composite was down 0.1%, and the Hang Seng index in Hong Kong was down 0.2%.
The S&P/ASX 200 in Sydney was up 1.3% following a softer-than-expected inflation print in Australia.
Consumer inflation in Australia slowed by more than expected last month, according to official data from the Australian Bureau of Statistics.
The annual rise in consumer prices cooled to 5.6% in May from 6.8% in April. The May inflation reading was lower than market consensus estimates of 6.1%, as cited by FXStreet.
The reduction in price inflation fuelled hopes for a pause in interest rate hikes by the Reserve Bank of Australia at its policy meeting next week.
Gold was quoted at USD1,916.06 an ounce early Wednesday in London, higher than USD1,914.73 on Tuesday. Brent oil was trading at USD72.89 a barrel, down from USD73.55 late Tuesday.
In Wednesday's UK corporate calendar, there are annual results from SDCL Energy Efficiency Income Trust.
The Federal Reserve releases its annual stress test results shortly after the New York equities close on Wednesday.
By Heather Rydings, Alliance News senior economics reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2023 Alliance News Ltd. All Rights Reserved.
