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UK stock markets are likely to open slightly higher on Thursday, 4 February, as domestic vaccine optimism outweighs the fallout of global equities. Japan’s Nikkei 225 concluded the day with a drop of little more than 1 per cent, China’s Shanghai Composite ended in negative territory with a dip of 0.44 per cent, while Hong Kong’s Hang Seng reversed the pre-lunch losses partly in late trade but was still hovering in red.
Mood of equities
Partially surrendering the late afternoon gains, the Dow Industrials finished on a positive footing on Wednesday with a marginal rise of 0.12 per cent. Meanwhile, the Great Britain pound (GBP) value sliding below 1.36 against the United States dollar (USD) is likely to weigh on domestic equities.
Extending the losses after the mid-morning trades on Wednesday, the benchmark FTSE 100 terminated marginally lower at 6,507.82, down 0.14 per cent. Other broader market indices including FTSE 350 and FTSE All-Share finished largely flat, whereas FTSE 250 rose 0.30 per cent at the close.
Around 0720 GMT, the futures linked to the headline FTSE 100 were trading 0.28 per cent higher, signalling a positive start for the London equities. In the last three trading sessions in February, the FTSE 100 has registered a cumulative gain of 1.57 per cent, while FTSE 250 has jumped more than 2.50 per cent indicating a relatively better set of corporate numbers for the mid-cap constituents as compared to the heavyweights.
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The outcome of the Bank of England’s Monetary Policy Committee meeting and the subsequent interest rate decision is likely to dictate the direction for the domestic equities in the near term. The Office for National Statistics is also due to announce the construction PMI for the month of January later in the day.
GBP under watch
The GBP vs USD pair extended losses after falling into the negative region in the early morning hours as foreign exchange traders cautiously eyed the result of the Bank of England policy meeting today. At around 0730 GMT, the GBP to USD currency pair was trading at 1.3590, down 0.40 per cent from the previous close of 1.3644.
During the session so far, the currency pair has oscillated between a high and low of 1.3654 and 1.3588 at the interbank foreign exchange market. The BoE had fixed a reference currency conversion rate of 1.3629 USD and 1.1331 EUR against a unit of pound sterling on 2 February.
Commodity check
Commodities witnessed a mixed-bag trading activity on Thursday with an ounce of gold falling sharply in the morning session, while crude strengthened. An ounce of yellow metal traded 0.40 per cent lower at $1,826.83, from the previous close of $1,834.19. Both Brent and WTI crude gained 0.40 to 1 per cent in the session today with a barrel of Brent crude oil trading at $58.98, up 0.49 per cent and WTI crude oil trading 0.97 per cent higher at $56.23 per barrel.
