Stocks to fall; retail sales data due

(Alliance News) - Stocks in London are set to open lower on Friday, as interest rate worries and geopolitical concerns continue to hang over markets.

IG says futures indicate the FTSE 100 to open down 38.0 points, 0.5, at 7,461.53 on Friday. The index of London large-caps closed down 88.47 points, 1.2%, at 7,499.53 on Thursday.

UK retail sales figures are due shortly, which are expected to show no annual growth for September, according to FXStreet-cited market consensus, after a 1.4% drop in August.

Fresh data painted a sombre picture for UK retailers, as consumer confidence has plunged in the run-up to the festive season. GfK long-running consumer confidence index fell nine points to minus 30 in October, taking it back to a level last seen in July last year.

This comes as uncertainties posed by conflict in the Middle East add to accelerating energy, fuel and mortgage costs.

In the US on Thursday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.8%, the S&P 500 down 0.9% and the Nasdaq Composite down 1.0%.

Market sentiment took another hit as the US Federal Reserve seemed to leave the door open for more monetary tightening.

Fed Chair Jerome Powell said US inflation is "still too high" despite a recent slowdown. Additional evidence of "persistently above-trend growth," or a reversal of the recent decline in job openings and softening of wage growth could cause the Fed to reconsider its current rate pause, he told a conference in New York.

Sterling was quoted at USD1.2136 early Friday, lower than USD1.2149 at the London equities close on Thursday. The euro traded at USD1.0577, little changed from USD1.0576. Against the yen, the dollar was quoted at JPY149.88, down a touch versus JPY149.92.

"Sentiment continues to remain fragile and while the geopolitical noise from the Middle East wasn't as apparent yesterday, it's still very much there and remains a clear and present danger for nervous investors, as concerns rise over third party involvement," said CMC Markets' Michael Hewson.

Brent oil was trading at USD93.25 a barrel early Friday, higher than USD91.28 late Thursday.

"Oil prices...finished the day higher on reports of drone strikes on US forces in Iraq, as well as a US warship intercepting rockets fired from Yemen by Iranian Houthi rebels aimed at Southern Israel," Hewson added.

Gold was quoted at USD1,977.89 an ounce early Friday, rising from USD1,952.66 on Thursday.

In Asia on Friday, the Nikkei 225 index in Tokyo was down 0.3%. Data showed consumer inflation slowed to below three percent last month for the first time since August 2022 on the back of easing gas and electricity prices.

The annual reading of 2.8%, excluding volatile fresh food prices, was just shy of market expectations of 2.7% and follows 3.1% rises in August and July in the world's number-three economy.

In China, the Shanghai Composite was down 0.6%, while the Hang Seng index in Hong Kong was down 0.4%.

China on Friday announced new curbs on exports of certain types of graphite, key to making batteries for electric vehicles, days after the US slapped fresh restrictions on outflows of high-tech microchips.

The S&P/ASX 200 in Sydney closed down 1.2%.

In Friday's UK corporate calendar, there is a trading statement from hotel chain operator InterContinental Hotels. There are also updates from estate agency Foxtons and currency & derivatives manager Record.

The economic calendar for Friday has UK public sector finances and retail sales readings at 0700 BST. There is also PPI data from Germany.

By Elizabeth Winter, Alliance News senior markets reporter

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