(Alliance News) - Stocks in London are set to open lower on Thursday, as US interest rate fears resurface, with all eyes on the US Treasury secretary's visit to China.
IG says futures indicate the FTSE 100 to open down 38.9 points, 0.5%, at 7403.20 on Thursday. The index of London large-caps closed down 77.62 points, or 1.0% at 7,442.10 on Wednesday.
"European markets have fallen every day this week, although yesterday's losses were by far the worst, and look set to continue again today. US markets also struggled yesterday, although their losses have been much more modest," noted CMC's Michael Hewson.
In the US on Wednesday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.4%, the S&P 500 down 0.2% and the Nasdaq Composite 0.2%.
In New York, Meta had closed up 2.9%, adding 1.0% in after-hours trading.
Five million users have signed up to Threads, Meta's newly launched text-based social media platform and rival to Twitter, CEO Mark Zuckerberg said Wednesday, just hours after the app's launch.
The app will not be available in the EU when it launches Thursday because of regulatory concerns, a source close to the company said. The app is seen as the biggest challenge yet to Twitter since the takeover by Elon Musk sent the social media platform, hugely popular with politicians and celebrities, into chaos.
"Rates and their potential trajectory has also troubled US markets but despite the continued drag on mega caps ahead of the latest Fed minutes, investors can't help but be a little excited about the prospect that Meta really has a 'Twitter killer' poised to launch on the app store," said AJ Bell's Danni Hewson.
Meanwhile, Wednesday's minutes from the Federal Reserve's June meeting showed the central bank was committed to raising interest rates further, despite pausing last month.
Fed officials signalled they plan to resume rate rises believing more tightening is required to tame inflation in the world's largest economy.
"Almost all participants noted that in their economic projections that they judged that additional increases in the target federal funds rate during 2023 would be appropriate," minutes from the June meeting of the Federal Open Market Committee showed.
CMC's Hewson commented: "Some officials wanted to carry on with rate hikes of 25 basis points but given the "uncertainty" about the outlook it was decided a pause would be preferable, just so long as it was made clear that the door to a July hike, as well as further hikes was pushed to the top of the narrative.
"This helps to explain the very hawkish guidance with no rate cuts expected by Fed officials until 2024."
The dollar was mixed against major currencies in early exchanges in Europe.
Sterling was quoted at USD1.2708 early Thursday, lower than USD1.2718 at the London equities close on Wednesday. The euro traded at USD1.0845, down from USD1.0876. Against the yen, the dollar was quoted at JPY143.71, down from JPY144.53.
US Treasury Secretary Janet Yellen will arrive in China on Thursday in a bid to inject stability into fraught ties between the world's two biggest economies. The top US official is expected to meet with Chinese counterparts and representatives from major American companies during a visit that will run through July 9.
"Persistent geopolitical tensions, ongoing concerns about US-China decoupling, domestic regulation, and China's internal growth challenges continue to support the pessimistic arguments about China's risk markets," said SPI Asset Management's Stephen Innes.
In China on Thursday, the Shanghai Composite was down 0.7%, while the Hang Seng index in Hong Kong was 3.1%.
In Japan, the Nikkei 225 index in Tokyo was down 1.7%. The S&P/ASX 200 in Sydney was down 1.3%.
Gold was quoted at USD1,920.41 an ounce early Thursday, lower than USD1,924.40 on Wednesday.
Brent oil was trading at USD76.45 a barrel, edging lower than USD76.54.
In Thursday's UK corporate calendar, there are full-year results from Currys, Jet2 and PayPoint. Robert Walters, Ferrexpo and Workspace will also publish trading statements.
The economic calendar has a UK construction purchasing managers' index print at 0930 BST and EU retail trade data at 1000 BST. The US weekly jobless claims report will be published at 1330 BST.
By Elizabeth Winter, Alliance News senior markets reporter
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