London pre-open: Markets focus on Eurozone, Japanese CPI, OPEC output decision
Little change is expected on the London market on Friday morning, despite a notably strong session in Asia overnight and ahead of the latest Eurozone inflation figure due out later on.
FTSE 100
8,044.81
16:49 23/04/24
FTSE 250
19,799.72
16:59 23/04/24
FTSE 350
4,424.29
16:59 23/04/24
FTSE All-Share
4,378.75
17:14 23/04/24
Gas, Water & Multiutilities
6,033.38
16:59 23/04/24
MERLIN PROP.
€10.44
18:15 23/04/24
Mining
10,339.98
16:59 23/04/24
Pennon Group
664.50p
16:45 23/04/24
Rio Tinto
5,317.00p
16:40 23/04/24
Also weighing on markets is the decision by the Organization of the Petroleum Exporting Countries (OPEC) to maintain a steady rate of oil output, a decision that rattled markets and sent the price of Brent tumbling.
City sources predict the FTSE 100 will open around three points lower than Thursday's close of 6,723.42.
"Thursday’s announcement from OPEC that saw them retain the current 30m barrels per day output ceiling was somewhat of an market oxymoron, being both expected and shocking in its nature," said Alpari market analyst Joshua Mahony.
"The ability to lower prices below the cost of production for many US shale producers means that many will invariably go out of business, leaving the market altogether or selling equipment and setting them back by years."
He also explained that this could mean oil prices could be these "ultra-low" levels for some time yet because their prices are set well into the future.
The Japanese consumer price index (CPI) released overnight fell to 2.9% in October, marking a further move away from the government's 2% target. Factoring in the April sales tax increase, the country recorded its first sub 1% inflation rate in 14 months at 0.9%.
Much of the day's focus will be on European markets with the release of Eurozone CPI, which is expected to show a drop to 0.3% from 0.4% a month earlier.
"Everything is set up for a more dovish European Central Bank going forward as long as CPI remains low and thus should we see a return to 0.3% it is likely that the stock markets will reflect this in a positive way given what it means for potential monetary policy going forward," Mahony explained.
In company news, diversified mining giant Rio Tinto has promised investors that "sustainable cash returns" will be delivered next year, as it highlighted its commitment to capital discipline and shareholder value. At an investor seminar in Sydney, the company said that going forward it would only focus on the projects with the highest returns to drive shareholder value.
Merlin Entertainments has announced plans to open its first Legoland themepark in South Korea, one of the largest Asian markets for Lego toy sales. The park is due to open in 2017 and is expected to make a full year contribution in 2018.
First-half revenue at utility infrastructure company Pennon rose, but profit was hit by increasing costs across the group’s two divisions. In the six months ended 30 September, revenue rose 3.8% year-on-year to £692.3m, while operating profit fell 14.7% to £119.2m and profit before tax was down 9.8% to £100m. Outlook remained positive, the firm said, adding that both of its divisions were making good progress in their respective projects.