(Alliance News) - Stocks in London are set to open flat on Wednesday, struggling for direction after a sizeable gain on Tuesday, as markets overlooked hotter-than-expected US inflation data.
UK gross domestic product data is scheduled for release at 0700 GMT. Numbers are expected to show the UK economy grew 0.2% on-month in January, following a 0.1% decline in December from November.
Elsewhere, the economic calendar has a eurozone industrial production reading at 1000 GMT.
IG says futures indicate the FTSE 100 to open just 2.7 points higher at 7,750.51 on Wednesday. The index of London large-caps had closed up 78.58 points, 1.0%, at 7,747.81.
In Asia on Wednesday, the Nikkei 225 in Tokyo fell 0.3%, while the Shanghai Composite was down 0.4% in late dealings. The Hang Seng in Hong Kong was a touch higher. Over in Sydney, the S&P/ASX 200 added 0.2%.
In New York, the Dow Jones Industrial Average ended up 0.6%, the S&P 500 surged 1.1% and the Nasdaq Composite jumped 1.5%.
Stocks in New York climbed strongly despite robust US inflation data. The Bureau of Labor Statistics said the pace of year-on-year consumer price growth picked up to 3.2% in February, from 3.1% in January, where it had been expected to remain, according to FXStreet cited consensus.
SPI Asset Management analyst Stephen Innes commented: "February's latest US core CPI figures have given the Federal Reserve reason to be cautious about early rate cuts. However, with two months remaining before June, there's still time for the data to sway the Fed's decision. Despite this, market expectations for rate cuts remain steady at around 80-90 basis points for the year, closely aligned with the Fed's projected 75 basis points cut.
"Traders are operating under the assumption of a 'loose-policy asymmetry,' believing that the Fed is comfortable with allowing inflation to hover above target without immediate action while remaining prepared to implement multiple rate cuts by the end of the year, with minimal chance of another hike. This perception of a 'Fed put' has led to various assets reaching all-time highs, as investors feel emboldened to pursue high-risk opportunities without fear of facing higher interest rates. The Fed's apparent lack of concern about the risk of a positive wealth effect reigniting demand-side inflation further supports this sentiment."
In early currency trade, the pound climbed to USD1.2794 from USD1.2783 at the time of the London equities close on Tuesday. The euro rose to USD1.0927 from USD1.0916. Against the yen, the dollar traded at JPY147.70, down from JPY147.76.
Brent oil was quoted at USD82.44 a barrel early Wednesday, down ever so slightly from USD82.49 at the time of the London equities close Tuesday. Gold was quoted at USD2,158.58 an ounce, down from USD2,163.49.
In Wednesday's UK corporate calendar, there are full year results from infrastructure construction Balfour Beatty and iron ore pellet producer Ferrexpo.
By Eric Cunha, Alliance News news editor
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