London pre-open: FTSE to jump after Bank of Japan increases rate of asset purchases
The Bank of Japan's (BoJ) decision to increase its rate of asset purchases means global indices are set for strong gains on Friday.
FTSE 100
8,049.64
10:40 23/04/24
International Consolidated Airlines Group SA (CDI)
178.75p
10:40 23/04/24
NATWEST GROUP
283.20p
10:40 23/04/24
Rolls-Royce Holdings
409.00p
10:40 23/04/24
The FTSE 100 is predicted to open around 80 points higher than Thursday's close of 6,463.55.
"Coming off the back of yet more weak inflation data, this move is both rational and unlikely and thus we have seen major gains globally overnight," explained Alpari market analyst Joshua Mahony, saying the timing of the decision caught markets off-guard.
The increase came after data showed that inflation fell to 3%, while unemployment climbed to 3.6% and household spending declined 5.6% year-on-year.
"The release of Japanese inflation data overnight was always likely to be a significant affair, bringing with it yet another indication that the Japanese are moving further rather than closer to the 2% target that [prime minster] Shinzo Abe said he would reach by next year."
Meanwhile, Friday's session will also be focused on the Eurozone consumer price index reading, which is forecast to show inflation rose by 0.4% in October, up from the 0.3% seen in September.
The European Central Bank has been fighting hard to bring inflation closer towards its target of just below 2%.
It has brought interest rates to an all-time low of 0.05%, turned the deposit facility negative, and introduced a packaged of asset backed securities and covered bonds purchases.
In the US, analysts predict a report will show personal spending rose by 0.1% in September, while the University of Michigan’s consumer confidence index is expected to confirm a reading of 86.4 in October.
Back in the UK, Royal Bank of Scotland has reported a pre-tax profit of £1.27bn for the third quarter of 2014, up from £1.01bn in the second quarter and a loss of £0.63bn the year before. "In February I placed trust at the heart of my new strategy for our bank. We have taken the first steps towards that goal, with early progress in making RBS simpler, clearer and fairer," said chief executive Ross McEwan.
Rolls-Royce's Trent 60 DLE industrial gas turbine has been selected by BG Group as the driver for the main refrigeration compressors in the proposed Lake Charles liquefied natural gas (LNG) export project in Louisiana, US. The two companies have also agreed a long-term service agreement covering the support and maintenance of the equipment for up to 25 years.
Anglo-Spanish airline conglomerate International Consolidated Airlines Group reported a big jump in third-quarter profits on the back of falling fuel costs and lifted its guidance for full-year growth. The company, otherwise known as IAG, said it now expected to increase full-year adjusted operating profits by €550m-600m, from €770m in 2013. At the half-year results in August, it had guided to a €500m improvement over last year.