- FTSE 100 hit session peak of 7,561.26 early on
- US stocks mostly flat ahead of July 4th holiday
- Oil up as Saudi extends production cut
4.52pm: Traders tempted into long weekend, analyst says
The FTSE 100 closed Monday down 4 points at 7,528 after a choppy, up-and-down session. That theme has been felt on both sides of the Atlantic ahead of the US 4th of July holiday.
"We may be seeing a bit of a trading lull at the start of the week with tomorrow's US bank holiday tempting many into an extended weekend," said Craig Erlam, senior market analyst at OANDA. "The economic calendar looks busy but with a large portion being PMI revisions, that doesn't necessarily equate to an abundance of trading activity. The revisions are often small and don't really move the needle in terms of expectations for the economy and, at this moment, interest rates.
Late in a shortened US session, the Dow was up 40 points, 0.1%, to 34,448, the Nasdaq Composite fell 8 points to 13,780 and the S&P 500 added 2 points to 4,452.
3.55pm: Boring before the 4th of July
With around 30 minutes to trading to go in London, the FTSE 100 was hovering just below opening levels reflecting the dull performance by US stock indexes on a half-day session ahead of the Independence Day break.
The caution on Wall Street came after data showed the June ISM manufacturing index fell to 46.0 in June, down from 46.9 in May, and below the consensus of 47.0.
Kieran Clancy, senior US Economist at Pantheon Macroeconomics commented: “The drop in the headline index takes it below its previous cycle low of 46.3, reached in March 2023, and extends the total decline since the Fed started raising rates to 12.4 points. Manufacturing remains in a sorry state—automakers excepted—as higher interest rates have depressed capital spending and the much-discussed boost from China’s re-opening has disappointed. The index is consistent with a reversal of recent modest gains in non-auto manufacturing output.”
He added: “The fall in the headline ISM index largely reflects a 4.4 point drop in the production subindex, to 46.7, a new cycle low, signalling a further drop in manufacturing output ahead. New orders rose three points, to 45.6, but this merely reverses the May plunge. The bounce in capital spending intentions in the latest regional Fed manufacturing surveys for June is encouraging, though this could easily just be noise; the regional surveys are extremely volatile, and the national ISM does not ask about capex plans. Either way, any sustained improvement in capital spending intentions would take several months to feed through to the hard output data.”
3.45pm: Soft commodities ripening
Consumers could soon be seeing a long-awaited correction to the unprecedented levels of food inflation seen in the UK throughout the past year as the cost of corn and other soft commodities are among the assets that have fallen the most in value on the AvaTrade platform over the past week.
Kate Leaman, chief market analyst at AvaTrade commented: “Looking at our most falling table this week, the top three instruments which had seen a price drop in the past week were all soft commodities. The fall in the price of both corn and wheat is on account of the extension of the UN-facilitated grain deal between Russia and Ukraine until 18 July, which has led to a rise in Ukrainian grain supply, increasing global corn and wheat exports.
“What’s more, countries around the world are beginning to feel the effects of El Niño. As the weather phenomenon is typically associated with bringing increased rainfall to regions such as the US and Canada, this has resulted in corn and wheat output in both nations actually benefitting from the heavy rains El Niño brings. As two of the largest global exporters of the commodities, this has seen prices fall.”
She noted: “In terms of sugar, prices have fallen on account of an increase in sugar supply from Brazil – the largest sugar producer and exporter in the world. Per UNICA, the Brazilian sugar-cane industry association, the country’s 2023/24 sugar production rose 37.7% Year-over-Year (YoY) in May, while sugarcane crushing rose to 46.8%, compared to 40.5% in May 2022."
Leaman concluded: “It looks like traders currently holding these soft commodities are looking to sell now in order to avoid a loss when prices crash. Of course, this doesn't mean that these price drops will immediately translate into lower prices at supermarkets or restaurants.”
3.25pm: US manufacturing PMIs weak
Confounding a batch of recent strong US data, two sets of manufacturing purchasing managers indexes (PMI) proved weak on Monday.
The Institute for Supply Management (ISM) manufacturing PMI fell to a reading of 46.0% in June of 2023, its lowest since May of 2020, down from 46.9% in May and below forecasts of an increase to 47.0%. June was the eighth consecutive month of contraction following a 28-month period of growth.
The Inventories Index dropped 1.8 percentage points to 44.0%, down from the May reading of 45.8%. The New Export Orders Index reading of 47.3% was 2.7 percentage points lower than May’s figure of 50.%. The Imports Index remained in contraction territory at 49.3%, but it was higher than the 47.3% reported in May.
In a statement, Timothy R. Fiore, chair of the ISM’s Manufacturing Business Survey Committee commented: “The US manufacturing sector shrank again, with the Manufacturing PMI losing ground compared to the previous month, indicating a faster rate of contraction. The June composite index reading reflects companies continuing to manage outputs down as softness continues and optimism about the second half of 2023 weakens.”
Meanwhile, the S&P Global US manufacturing PMI fell to a reading of 46.3 in June, down from 48.4 in May, signalling the steepest decline in operating conditions so far in 2023, as the recent downturn intensified. S&P Global noted that manufacturing performance has deteriorated in seven of the last eight months.
In a statement, Chris Williamson, chief business economist at S&P Global Market Intelligence, commented: “Leading the darkening picture was a severe drop in demand for goods, with new orders slumping at a rate among the steepest since the global financial crisis of 2009. Companies report that customers have become increasingly reticent to spend amid the rising cost of living, higher interest rates, growing concerns about the economic outlook and a switch in spending to service.”
“Exacerbating the downturn has been a continued focus on inventory reduction as manufacturers, their suppliers and their customers all seek to cut warehouse stocks in the face of weakening demand,” Williamson added.
3.05pm: Caution for banks
The Bank of England (BoE) has told banks that they may be underestimating their exposure to private equity and to commodity markets at a time when rising interest rates could squeeze liquidity in markets, Reuters has reported.
The warning came as Nathanael Benjamin, the BoE's executive director for authorisations and international banks, set out his priorities for the coming year.
"So we intend to closely monitor private asset financing, and it is important that firms think about those hidden risks they could face, including as they assess and set limits for large counterparty exposure," Benjamin told a UK Finance event, Reuters noted.
"All banks, commodities house or otherwise, need to be up to the task of identifying those connections pro-actively, and anticipating when and where these risks could emerge, because ultimately when they crystallise for the broader economy, they crystallise for banks too," he added.
He cautioned banks against moving into business areas not in their "DNA".
"So firms need to ensure that their business as it currently exists is operationally resilient before growing or changing significantly, before venturing into new products or markets," he concluded, Reuters said.
2.40pm: Holiday mood muted
The FTSE 100 nursed modest losses midafternoon as US stocks started Monday mixed, consolidating recent strong advances with investors more focused on Tuesday's Independence Day fireworks.
Around 15 minutes after the New York open, the Dow Jones Industrial Average was down 92 points, or 0.3% at 34,315, while the S&P 500 shed 0.1%, but the Nasdaq Composite rose 0.1%. US markets will close at 1.00pm ET Monday ahead of the holiday.
2.25pm: Kroo growing and planting
Kroo, the UK fully licensed digital bank last week reached 100,000 personal current accounts as it approaches its £15mln target in B+ funding to support the higher-than-expected growth.
In a statement, the company said its latest funding round is part of “an exciting trajectory of fast growth for the digital challenger bank as it reached a significant milestone of customers ahead of target after launching its flagship current account offering in December 2022.”
Kroo's series B+ funding round has so far come from high-net-worth individuals and family offices. The funding will be invested in functionality and customer experience, with a portion used for regulatory capital. After 73% employee growth last year, the company also has plans to continue scaling up its team internally while driving forward further product enhancements and customer acquisitions.
Andrea De Gottardo, CEO of Kroo, commented: “With a clear vision and strategy for our growth, we're challenging the traditional banking model to pave the way for a future of better banking that allows customers to trust and have a better relationship with their bank. Due to the bank's growth after being awarded our banking license last summer, launching our first financial product to the market in December, and now achieving this significant user milestone, it's clear that our customers also share our values. Banking should be simple and fair, which we want to see going forward.”
He added: “Our latest funding round will help us continue to give our customers the service they want from their bank and scale up our capital to allow us to explore the addition of further financial products, including providing lending options."
Kroo secured its full UK banking licence in 2022 and launched its flagship FSCS-protected current account now with 4.10% AER (variable) interest on up to £85,000 from 1 July. The digital bank plants two trees for every new customer who opens a current account, with the goal of planting one million trees by 2024.
2.15pm: Virgin spat
Billionaire Richard Branson severely damaged Virgin Group's reputation by residing in a tax haven while UK-based airline Virgin Atlantic sought a government bailout during the pandemic, according to internal Virgin emails cited in a lawsuit on Monday, Reuters reported.
The emails were cited by lawyers for US train operator Brightline, which is being sued by the Virgin Group after cancelling a deal to use the Virgin brand in 2020, just over 18 months after it was signed. Under the deal Brightline operated a rail line in Florida using the name Virgin Trains USA.
Brightline says it cancelled the deal because the Virgin brand had been hit by negative press coverage of Branson's 2020 claim that Virgin Atlantic would need a bailout from the UK government to survive the pandemic, Reuters said.
Virgin argues that its brand was not materially damaged by the group's handling of COVID-19, meaning Brightline was not entitled to cancel the licensing deal without paying an exit fee of up to $200mln. The company is also seeking unpaid royalties.
1.30pm: A quick look at some of today’s movers
Risers
Yourgene - up 140% to 0.47p: Novacyt is swooping to buy Yourgene, in a deal that values the latter at £16.7mln, a 168% to Friday’s closing price. Unsurprisingly, Yourgene shares shot up 140% to close to the offer price, while Novacyte's stock jumped 49%
Empire Metals - up 9% to 1.4p: Empire Metals shares jumped as the Aussie explorer confirmed titanium deposits stretch across the entirety of the anomaly at its Pitfield project in Western Australia. Pitfield was and still is seen as a huge copper prospect for Empire, so the titanium is just a bonus currently, though estimates currently are for it to rank among the largest in the world.
Technology Minerals - up 8.5% to 1.9p: Shares rose on Monday morning after the company announced ex-Porsche UK boss Andrew Goss is among two new advisor appointments at subsidiary Recyclus.
Verici Dx - up 7.8% to 12.6p: Shares jumped 19% higher after the developer of advanced clinical diagnostics for organ transplant announced successful validation results from its prospective, blinded, international multi-centre clinical study for Clarava.
Fallers
Zanaga - down 21.4% to 9.7p: Zanaga Iron Ore Company Ltd's shares fell on what looked like a fairly benign funding package designed to limit dilution. Shard Merchant Capital said it will try to sell 36 million Zanaga shares in three tranches, returning 95% of the proceeds. At today's prices, the mine developer would receive £3.7 million. In turn, the additional stock would increase Zanaga's equity base by just 5.9%.
1.00pm: Mixed start seen in shortened US session
US stocks are expected to start the first session of the second half of 2023 in mixed fashion after strong gains on the final session of the first half on Friday, with investors more focused on Tuesday's Independence Day holiday.
In pre-market trading, futures for the Dow Jones Industrial Average (DJIA) were 0.1% lower, while those for the S&P 500 were flat, but contracts for the Nasdaq-100 added 0.1%. The markets will close at 1.00pm ET on Monday ahead of Independence Day.
On Friday, the DJIA ended 285 points, or 0.8% higher at 34,407, while the S&P 500 index jumped 1.3%, and the Nasdaq Composite added 1.5%.
The Nasdaq Composite closed out its biggest first-half gain since 1983, surging 31.7%, while the S&P 500 jumped 15.9% for its best first-half since 2019. The DJIA lagged, climbing a modest 3.8% during the period.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank commented: "Equities did well. Even though profits fell, they fell less than expected and more importantly, AI saved the day sending the Big Tech stocks to a nice bull market. Bonds on the other hand tumbled as US spending and growth remained resilient. The latter convinced the Federal Reserve that it should keep hiking the interest rates."
"But," she added, "last week’s strong economic data released in the US, combined with Friday’s softer-than-expected PCE figures supported, yet again, the idea of a soft landing and further fueled the rally in stocks."
"Of course, this incredible performance makes many investors wonder whether the equity rally could continue in the second half," Ozkardeskaya concluded.
Investors will have the latest US ISM Manufacturing PMI and S&P Global manufacturing PMI data for June to assess on Monday morning, ahead of Friday’s always crucial June jobs report.
On the corporate front, Tesla shares were little changed in overnight trading after the electric vehicle maker reported delivery and production numbers that beat analysts’ expectations.
Elsewhere, United Airlines shares inched marginally lower as bad weather contributed to a swath of flight disruptions over the long holiday weekend.
12.50pm: Petrol retailers "profiting at our expense"
Sarah Coles, head of personal finance, Hargreaves Lansdown says the CMA report on prices at the pump "highlights what motorists have long suspected – that petrol stations are profiting at our expense."
"When prices soared in the middle of last year, costs at the pump went up like a rocket and we all paid the price," she said.
"Then when they dropped back, the supermarkets dragged their feet in passing on cheaper prices, and they fell like a feather."
"The rest of the market followed in their wake, so margins on fuel rose by 6p a litre. Life has been particularly difficult for diesel drivers, who are paying 13p a litre more thanks to higher margins," she explained.
12.39pm: UK manufacturers battle staff shortages
UK manufacturers are struggling to battle staff shortages, latests figures have showed.
Data from Make UK, an industry body, and the professional services firm BDO showed that there were still 74,000 unfilled vacancies in the sector, creating a £6.5bn economic gap that needed filling despite overall employment increasing last year.
Manufacturing, which accounts for about 10% of the UK’s economic output, has been stuck in the doldrums this year even as the dominant services sector has continued to expand.
The latest PMI for the sector released today showed the sector had contracted to a six-month low.
Make UK’s regional outlook found that Yorkshire and the Humber reported the biggest jump in manufacturing jobs, with employment up 46,000 last year. It means that just over a tenth of all jobs there are in manufacturing.
The South West and the East of England reported 27,000 to 28,000 new jobs in manufacturing last year. The North West lost 21,000 jobs and the East Midlands shed 7,000. The total remained stable at 147,000 in Wales.
12.14pm: Home and motor insurers rebuked by FCA
The UK financial watchdog has blasted home and motor insurers over their treatment of vulnerable customers and their handling of complaints in the cost of living crisis.
The Financial Conduct Authority said it had completed a review into home and motor insurers’ practices which uncovered that some had failed to give customers appropriate settlements, handle their complaints in time and identify vulnerable customers in need of support.
The watchdog’s review also found instances of motor insurance customers being offered a price lower than their car’s fair market value after it had been written off, a violation of FCA rules. The regulator said it is “taking action” against firms who have broken its rules.
Sheldon Mills at the FCA, said: "Timely and fair claims handling is especially vital during the cost of living squeeze."
‘While we have seen many firms treating their customers correctly, we found too many examples of customers not receiving the service they’re entitled to."
11.40am: Weaker competition led to higher prices at pump says CMA
Britain’s competition regulator has warned that motorists are paying higher prices for petrol and diesel, due to a decline in competion in the sector.
Following a review of the sector, the Competitions and Markets Authority has identified a series of problems in the retail market for motor fuel.
It CMA explained that supermarket chains Asda and Morrisons - traditionally price leaders in the market - have taken a "less aggressive approach to pricing” since 2019 and other supermarkets have not reacted by cutting their own prices.
"As a result of these factors drivers have been paying more than would otherwise have been the case," the CMA said.
"We estimate that the financial impact of the 6p per litre (ppl) increase in average supermarket fuel margin from 2019 to 2022 results in a combined additional cost of around £900mln for customers of the four supermarket fuel retailers in 2022 alone," it added.
The CMA thinks the government should create, on a statutory basis, an open data fuel finder scheme, which would require retailers to share their prices on an open, real-time basis, meaning that drivers can easily compare prices in any area of the UK.
It also thinks the government should create a fuel monitor function within an appropriate public body, to monitor developments in the market.
11.08am: Oil price spikes as Saudi extends production cut
The oil price has spiked after the Saudi Ministry of Energy said the voluntary cut of 1mln barrels per day, which began in July, will be extended to cover August.
This means the Kingdom’s production for the month of August 2023 will be approximately 9mln barrels per day (bpd), down from around 10mln ln bpd in May.
Russia is also planning to cut crude export flows next month in an effort to keep the global market balanced
Deputy prime minister Alexander Novak revealed Moscow would cut half a million barrels per day off its output, saying: "Russia will voluntarily reduce its oil supply in the month of August by 500,000 barrels per day by cutting its exports by that quantity to global markets.”
Brent crude rose 0.8% to US$76.02 a barrel while West Texas Intermediate also traded 0.8% to the good at US$71.15.
10.38am: Banks rally as analysts highlight value
UK banking stocks are enjoying a strong start to the week after recent falls as rising interest rates spark fears of an economic slowdown.
Analysts at Jefferies see value in the sector after conducting an analysis of household data including a look at consumer credit loss modelling.
The broker concluded that for the UK's top-four income deciles, accounting for 70% of mortgage debt, the burden of rising rates is manageable (assuming all mortgages reprice to 6%) with no knock-on impact on discretionary spending.
It sees unemployment as the most significant medium-term factor on credit risk while in the near-term the issue is balance sheet size amidst mortgage repayments/deposit outflows.
“Our loss modelling concludes that whilst loss rates are expected to move modestly higher in '24, the ultimate driver of loss is unemployment, and we do not see this being of material earnings consequence until the unemployment rate surpasses 5%,” Jefferies said.
It has 'buy' ratings on Lloyds, Barclays, NatWest, HSBC and Standard Chartered.
The broker did lower its price target for NatWest to 380p from 420p.
Barclays reckons deposits remain the key sensitivity for UK banks with outflows and rising betas ongoing risks.
“But our new work on current account stickiness and mix shift shows resilience longer term, underpinned by a stronger hedge tailwind,” it said.
“We see Lloyds best placed, offering compelling value for those willing to be patient.”
The broker kept an 'overweight' rating but trimmed its price target to 70p from 75p. It has an equal weight rating on NatWest but cut its target to 360p from 380p.
Shares in Lloyds, NatWest and Barclays rose 1.7%, 1.9% and 1.9% respectively.
9.50am: UK manufacturing sector at six-month low
The UK manufacturing sector hit a six-month low in June, with levels of output, new orders and employment suffering further declines, according to the latest S&P Global/CIPS figures.
This was despite signs of price and supply chain pressures easing, as client uncertainty and subdued conditions in domestic and export markets continued to weigh on order books.
The seasonally adjusted S&P Global/CIPS UK manufacturing PMI fell to a six-month low of 46.5 in June, down from 47.1 in May.
However, the figure was above a preliminary reading of 46.2.
#UK manufacturers suffer further declines in output, new orders and employment in June as the sector continues to struggle in the face of lackluster demand. The headline #PMI fell to a 6-month low of 46.5 (May: 47.1). Read more: https://t.co/RpYn8htiN1 @cipsnews pic.twitter.com/JrNYV5n7kX
— S&P Global PMI™ (@SPGlobalPMI) July 3, 2023
The PMI has signalled contraction in each of the past 11 months. All five of the subcomponent indices (output, new orders, stocks of purchases, employment and suppliers' delivery times) were at levels consistent with weaker operating conditions.
John Glen, chief economist at the Chartered Institute of Procurement & Supply (CIPS), said: “A combination of depressed sales from domestic and overseas markets and strong price pressures hanging around has resulted in levels of new business reducing for the third month in a row.”
9.38am: AstraZeneca falls as trial falls short of best case
Shares in AstraZeneca fell 3.9% after the pharma giant unveiled trial results from the Tropian-Lung01 phase III trial.
Analysts at Jefferies said the results seem “likely to fall short of best case.”
“Limited detail, as expected, with results said to provide "compelling evidence", suggesting a less pronounced benefit than hoped, in our view, plus "some" Grade 5 ILD related deaths” the broker noted.
Jefferies said success had been widely anticipated.
However, analysts at Shore Capital expected the result to be viewed positively, “albeit in the absence of this being described as ’clinically meaningful’ and the safety events noted we would like to see data in detail before drawing any firm conclusions.”
The trial looked at datopotamab deruxtecan, or Dato-DXd, in advanced non-small cell lung cancer.
In patients will locally advanced or metastatic NSCLC treated with at last one prior therapy, the treatment showed a "statistically significant" improvement for the dual primary endpoint of progression-free survival compared to docetaxel, the current standard of care chemotherapy.
However, for the dual primary endpoint of overalll survival, the data "were not mature".
"An early trend was observed in favour of datopotamab deruxtecan versus docetaxel that did not meet the prespecified threshold for statistical significance at this interim analysis," the company said.
9.11am: JD Sports enters Middle East with franchise deal
JD Sports has announced its first franchise agreement which will see it open stores in the Middle East as it pushes ahead with its ambitious store opening plans.
The franchise deal with GMG, a Dubai-headquartered well-being company, will see around 50 stores opened under the JD fascia by 2028, focused on the UAE, Saudia Arabia and Egypt.
The sports fashion retailer said the 10-year deal would be "a meaningful contributor to JD's plans to open between 200 and 300 new stores each year over the next five years."
The agreement forms part of JD's global growth strategy announced by new boss Régis Schultz, unveiled at the company's Capital Markets Event in February.
"The partnership will enable JD to deliver on the rollout of its 'JD Brand First' strategy and is a pivotal move in the continued expansion into underpenetrated markets," JD said.
Schultz said there was "massive untapped potential for retailers in the Middle East."
Shares in JD Sports were little changed.
8.49am: FTSE higher, led by miners and oil majors
The FTSE remains in the green but off early highs, now up 10 points at 7,542.
Susannah Streeter at Hargreaves Lansdown said: “The FTSE 100 opened marginally higher, helped by the tailwinds of a strong session in Asia and on Wall Street on Friday.”
“But it’s still struggling to find significant momentum, dragged down by concerns about growth in China and the wider global economy.”
“Regaining its form and heading back to the heights of above 8,000 reached at the start of the year, still looks decidedly challenging,” she felt.
Miners and oil stocks are leading the risers.
But Astra Zeneca fell 4.6% despite what Shore Capital called “positive top-line data from the Phase III TROPION-Lung01 trial for its partnered pipeline asset datopotamab deruxtecan.”
However, the company said that “for the dual primary endpoint of overall survival, the data were not mature and an early trend was observed in favour of datopotamab deruxtecan versus docetaxel that did not meet the prespecified threshold for statistical significance at this interim analysis.”
Trials will continue.
8.18am: FTSE 100 makes strong start
The FTSE 100 pushed higher in early trading consolidating Friday’s strong gains.
At 8.15am, London’s blue-chip index was up 26.94 points, or 0.4%, at 7,558.47 while the FTSE 250 climbed to 18,489.23, up 72.47 points, or 0.39%.
Richard Hunter at interactive investor said: “The tentative return to something of a risk-on approach was reflected by buying interest in the miners, while banks saw some relief after a recently turbulent time and ahead of their half-year reporting season at the end of this month.”
Miners occupied the top four places in the FTSE 100 risers with Anglo-American, Antofagasta, Glencore and Rio Tinto all in the green.
On a quiet day for corporate news, Tesco named Gerry Murphy as its new chair succeeding John Allan who stepped down after allegations of misconduct.
The current Burberry and Tate & Lyle chair will join the UK’s largest retailer at the start of September.
Shore Capital’s Clive Black said: “We see this as an astute and good appointment by Tesco.”
“Murphy has had a high-quality career that embraces considerable elements of the UK consumer scene having being CEO of both Greencore and Kingfisher.”
Tesco shares rose 0.7%.
John Wood was another early riser with shares up 1.1% after the firm said it has secured a US$250mln contract extension from Brunei Shell Petroleum, Brunei's largest energy producer.
Peel Hunt said this was “ a positive development.”
7.54am: Tesco names Gerry Murphy as new Chair
Tesco has named Gerry Murphy as its new Chair on 1 September 2023 replacing John Allan, who has stepped down as allegations of misconduct.
Murphy has extensive global leadership experience and is currently chair of Burberry and Tate & Lyle.
He plans to step down from Tate & Lyle on September 1.
Much of his executive career was spent in retail and other customer-focused businesses in senior leadership and commercial roles, most recently as chief executive of Kingfisher.
Tesco interim chair Byron Grote said: “He was the unanimous choice of the board,” and will bring “a record of strong and effective boardroom leadership and a deep understanding of retail and consumer-focused businesses and corporate governance.”
In May, Allan said he was stepping down to prevent the impact of the allegations against him “from becoming disruptive to the company”.
Four allegations about Allan emerged following an investigation by the Guardian into the Confederation of British Industry.
Allan vehemently denies what he has called “anonymous and unsubstantiated allegations” of misconduct against him.
7.05am: Bright start see for FTSE
London’s blue chips are expected to open higher on Monday, extending Friday’s strong gains.
Spread betting companies are calling the FTSE 100 up by around 9 points. The index of London large-caps added 59.84 points to 7,531.53 on Friday.
“A decent Asia session looks set to translate into a positive start for European markets although current unrest in France is likely to prompt questions about economic activity there in the coming weeks,” said Michael Hewson at CMC Markets.
In Asia, the Nikkei 225 index in Tokyo was up 1.7%. In China, the Shanghai Composite was up 1.3%, while the Hang Seng index in Hong Kong was up 1.8%.
On Friday, US markets rose after a weaker-than-expected PCE inflation, the Federal Reserve’s preferred inflation gauge.
Today, sees a slew of manufacturing PMIs which are likely to confirm the weakness of the sector.
Hewson said: “Today’s manufacturing PMIs are set to confirm the weak nature of this part of the global economy, with Spain, Italy, France, and Germany PMIs all forecast to slip back to 47.9, 45.3, 45.5, and 41 respectively.”
“UK and US are also expected to remain soft at 46.2 and 46.3 respectively, while the US ISM manufacturing survey, is also forecast to remain below 50, at 47.2, with prices paid at 44.”