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FTSE 100 likely to open flat as DJIA ends in red after hitting a record high
UK stocks are likely to open flat on Wednesday, 30 December, following the mixed global cues with the Asian equities hovering in a negative zone, while Dow Industrials ended in red after hitting record highs.
The NYSE’s key stock index Dow Jones Industrial Average (DJIA) soared modestly to a lifetime peak after the House of Representatives signed higher quantum stimulus cheques of $2,000. All the three major stock indices of the United States, including DJIA, S&P 500 and Nasdaq Composite concluded lower after surrendering the morning gains.
Back in London, the Downing Street administration securing free-trade access with the European Union before the completion of Brexit transition deadline lifted the mood of market participants on Tuesday. The headline stock index FTSE 100 jumped as much as 2.68 per cent to a nine-month high of 6,676.60 before closing 100.54 points or 1.55 per cent higher at 6,602.65.
(Source: Refinitiv, Thomson Reuters)
The Great Britain pound regained its strength against the United States dollar with a unit of pound sterling trading for above 1.35 US dollars. At around 0629 GMT, the GBP vs USD pair was trading at 1.3531, up 0.23 per cent from the previous close of 1.3500 as on Tuesday. The Bank of England had fixed a currency conversion rate of 1.3588 USD and 1.1142 EUR against a unit of pound sterling on 24 December.
London equities terminating at the highest level since the eruption of coronavirus pandemic and pound sterling oscillating near its 31-month highs against the greenback on Tuesday seemingly dictates the restored confidence of the investors. With a day and half trading session left for the holiday-truncated week and the present calendar year, it will be crucial for the benchmark index to bounce back from the Covid-19-led bottoms.
The UK and EU agreeing for a conclusive trade arrangement from 1 January 2021 coupled with the optimism over the forthcoming year, touted as the year of recovery, has partially overridden the recently-developed jittery after the country reported a newly-mutated virus strain.
On the commodities front, an ounce of gold was trading at $1,882.46, up 0.22 per cent from the previous close of $1,878.42. The persisting inclining of investors in the yellow metal has been largely due to the prolonged subduedness in the United States dollar. The greenback slumped to its lowest level in two years against the euro even after the House signing relief cheques.
Meanwhile, the energy market furthered the gains on Wednesday continuing the two-day winning streak with the Brent crude oil trading at $51.39 per barrel, up 0.31 per cent and a barrel of WTI crude hovering 0.42 per cent higher at $48.20. The cryptocurrency market bounced back sharply on Wednesday with the bitcoin hitting a fresh all-time high of $28,554.11.
