(Alliance News) - Stocks in London are set to open higher on Thursday as markets shrugged off China's deepening property crisis and fears of rising interest rates.
IG says futures indicate the FTSE 100 to open 14.28 points, or 0.2%, at 7,607.50 on Thursday. The index of London large-caps closed down 32.50 points, or 0.4%, at 7,593.22 on Wednesday.
Embattled property giant China Evergrande suspended trading of its shares on the Hong Kong stock exchange on Thursday, according to notices posted by the bourse.
Trading in its two other units – the property services and electric vehicle groups – also stopped "at 9:00 am today" according to the notices.
The halt in trading comes a day after a Bloomberg report that Evergrande's billionaire boss Xi Jiayin was being held by police under "residential surveillance".
Evergrande had only just resumed trading a month ago after the company was suspended for 17 months for not publishing its financial results.
On Sunday, the firm said it was unable to issue new debt as its subsidiary, Hengda Real Estate Group, was being investigated and on Friday it said meetings planned this week on a key debt restructuring plan would not take place.
The firm said it was "necessary to reassess the terms" of the plan in order to suit the "objective situation and the demand of the creditors".
Evergrande's enormous debt - estimated it at USD328 billion at the end of June – has contributed to the country's deepening property sector crisis, raising fears of a global spillover.
In China on Thursday, the Shanghai Composite was up 0.2%, while the Hang Seng index in Hong Kong was down 0.9%. In Tokyo, the Nikkei 225 index was down 1.8%. The S&P/ASX 200 in Sydney was down 0.1%.
Gold was quoted at USD1,876.62 an ounce early Thursday, lower than USD1,880.42 at the London equities close on Wednesday. Brent oil was trading at USD94.89 a barrel, down from USD95.52.
Oil was close to the USD100-a-barrel mark on Thursday amid concerns about growing demand and waning supplies.
Oil prices have risen 30% since June after some of the world's biggest producers, including Saudi Arabia and Russia, announced a series of supply cuts to last until the end of this year.
The rise has fuelled concerns over persistent inflation adding to the narrative that interest rates will have to stay higher, for longer.
Higher for longer fears resurfaced last week after the US Federal Reserve left its benchmark interest rate at a 22-year high but signalled it still expects one more hike before the end of the year and fewer cuts than previously indicated next year.
Fed Chair Jerome Powell, speaking at a press conference following the decision on Wednesday last week, pledged to keep rates restrictive until confident inflation was moving down to 2%, saying there was a "long way to go".
In the US on Wednesday, Wall Street ended mostly higher with the Dow Jones Industrial Average up 0.2%, the S&P 500 flat and the Nasdaq Composite up 0.2%.
Sterling was quoted at USD1.2143 early Thursday, virtually flat against USD1.2140 at the London equities close on Wednesday. The euro traded at USD1.0507, lower than USD1.0517. Against the yen, the dollar was quoted at JPY149.32, lower versus JPY149.42.
In Thursday's corporate calendar, there are half-year results from Ceres Power, XLMedia, and Avacta Group.
The economic calendar has the US weekly unemployment claims report and GDP print at 1330 BST.
By Heather Rydings, Alliance News senior economics reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2023 Alliance News Ltd. All Rights Reserved.
