FTSE 100 to continue losing streak

(Alliance News) - Stocks in London are set to open lower on Friday, as global equities continue to suffer amid concerns over interest rates and China's economy.

IG says futures indicate the FTSE 100 to open down 30.1 points, 0.4%, at 7,280.11 on Friday. The index of London large-caps fell 46.67 points, 0.6%, at 7,310.21 on Thursday.

"This week hasn't been a good week for the FTSE100, with 4 days of declines on top of a poor finish to the end of last week, with the index down 4% over the last 5 days, and down at 5-week lows," noted CMC Markets' Michael Hewson.

There will be UK retail sales for July due shortly. They are expected to fall 0.5% month-on-month, according to FXStreet-cited consensus, having risen 0.7% in June. Annually, they are expected to be 2.1%, having been 1.0% behind the prior year in June.

While clothing spending is likely to have fallen due to the wet weather, Hewson considered there could be factors working in favour of positive growth in retail sales.

"Recent spending data from Barclaycard showed entertainment spending rose 15.8% in July on the back of an uptick in spending for live events including Taylor Swift, as well as bookings for holidays after a warm June. We also saw the release of 4 big movie releases during July, including Indiana Jones and the Dial of Destiny, Mission Impossible Dead Reckoning, Barbie, and Oppenheimer," he recalled.

Meanwhile, US equities struggled on Thursday as bond yields soared amid lingering concerns over inflation and rising interest rates. Adding fuel to the fire, the latest US jobs print showed no sign of loosening in the labour market, as weekly jobless claims edged lower.

Wall Street ended in the red, with the Dow Jones Industrial Average down 0.8%, the S&P 500 down 0.8% and the Nasdaq Composite down 1.2%.

Sterling was quoted at USD1.2738 early Friday, lower than USD1.2746 at the London equities close on Thursday. The euro traded at USD1.0878, higher than USD1.0872.

In Asia on Friday, the Nikkei 225 index in Tokyo was down 0.7%.

Japan's consumer price inflation eased to 3.1% year on year in July, in line with market expectations, government data showed. The figure for the world's third-largest economy, which excludes volatile fresh food prices, followed a 3.3% reading in June. Stripping out fresh food and energy, Japan's prices rose 4.3%, data published by the internal affairs ministry showed.

Friday's core consumer price index figure matched market expectations of 3.1% recorded in a Bloomberg survey. Prices for processed food, telecommunication costs and hotel rates rose while electricity bills declined.

Against the yen, the dollar was quoted at JPY145.36, down versus JPY146.06.

In China, the Shanghai Composite was down 0.5%, while the Hang Seng index in Hong Kong was down 1.7%.

In a further sign of trouble in China's property sector, embattled Chinese developer Evergrande Group filed for bankruptcy protection in the US on Thursday, court documents showed, a measure that protects its US assets while it attempts to restructure.

The company's woes have come to symbolize the growing crisis in China's sprawling property sector, which accounts for a huge portion of the world's number two economy, that many fear could spill over globally.

The S&P/ASX 200 in Sydney was down 0.1%.

Gold was quoted at USD1,892.43 an ounce early Friday, little changed from USD1,893.44 on Thursday. Brent oil was trading at USD84.01 a barrel, lower than USD84.68.

Friday's economic calendar has a eurozone inflation reading at 1000 BST, after UK retail sales data at 0700 BST.

In the local corporate diary, building materials firm Kingspan Group reports half-year results.

By Elizabeth Winter, Alliance News senior markets reporter

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