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UK stock markets are likely to open lower on Wednesday, 24 February, as inflationary fears rattled investors’ sentiments with most of the Asian equities registering a sharp plunge. The headline stock indices from Tokyo to Hong Kong, barring India’s Nifty 50, fell 1 to 4 per cent tracking the topsy-turvy trading on Wall Street with the Dow Industrials finishing marginally higher. The futures linked to FTSE 100 tumbled over 0.60 per cent to below 6,540 levels, indicating a negative start to the London equities.
Equities falter
Japan’s Nikkei 225 shed 1.57 per cent, China’s Shanghai Composite plunged 2.81 per cent, South Korea’s Kospi fell 2.21 per cent, Australia’s ASX 200 slipped 0.90 per cent, Hong Kong’s Hang Seng crashed 3.56 per cent, while India’s Nifty 50 rose 0.77 per cent in the session so far.
Yesterday, the benchmark FTSE 100 managed to close in green at 6,625.94, gaining 0.21 per cent from the previous close of 6,612.24. The index that mostly had positive sessions in the first half of the present month has cumulatively lost 1.93 per cent in the last six trading days. As per the closing on 23 February, the index stands with a year-to-date gain of 2.56 per cent, but it is still trading over 7 per cent lower on a 12-month scale.
Investors have been proceeding ahead with a cautious tone as the corporates reveal their October-December quarter numbers. Among the major enterprises, Reckitt Benckiser Group Plc (LON: RB) and Lloyds Banking Group Plc (LON: LLOY) are set to announce their respective Q4 and FY20 results later in the day. London equities are likely to get a meaningful direction after the presentation of Budget 2021 by Rishi Sunak, Chancellor of the Exchequer, on 3 March.
Pound beyond 34-month high
Meanwhile, the Great Britain pound (GBP) has recorded a 34-month high against the United States dollar (USD) with the pound sterling racing over the level of 1.42. As per the latest foreign exchange data, the GBP vs USD pair was trading at 1.4171 (0631 GMT), up 0.44 per cent from the previous close of 1.4110.
During the day so far, the currency pair has touched a fresh 34-month high of 1.4234 and an intraday bottom of 1.4103 at the interbank foreign exchange market. The Bank of England had fixed a reference exchange rate of 1.4059 USD and 1.1574 EUR against a unit of pound sterling on 22 February.
Commodity check
Commodities witnessed a varied trading activity on Wednesday with the spot gold rising marginally tracking the persisting weakness of the US dollar. An ounce of spot gold rose 0.11 per cent to $1,807.87 from the last close of $1,805.86. A marketwide drop was seen in the energy assets with crude oil sliding up 0.70 per cent. According to the latest data available, brent crude oil dipped 0.36 per cent to $64.25 per barrel, while a barrel of West Texas Intermediate (WTI) crude fell 0.63 per cent to $61.28.
