(Alliance News) - Stocks in London are set to open higher on Monday, following a strong performance in New York's equity markets at the end of last week.

IG says futures indicate the FTSE 100 to open up 17.1 points, 0.2%, at 7,479.03 on Monday. The index of London large-caps edged up just 2.84 points to 7,461.93 on Friday.

In the US on Friday, stocks on Wall Street rallied, with the Dow Jones Industrial Average up 1.1%, the S&P 500 up 1.2% - reaching an all-time high - and the Nasdaq Composite up 1.7%.

"The current divergence between US and European markets is probably down to the belief that the US economy is in much better shape than its European counterparts, a belief that is likely to be reinforced further this week by the latest US Q4 GDP numbers, ahead of next week’s Fed meeting," said CMC Markets UK chief market analyst Michael Hewson.

Meanwhile, the dollar pulled back against major currency over the weekend. The US Federal Reserve has entered its 'blackout' period ahead of next Wednesday's monetary policy decision.

"When the Fed goes silent ahead of the January policy meeting, the market does not necessarily fly blind; instead, it creates an environment where market participants will zero in on incoming economic data," said SPI Asset Management's Stephen Innes.

The key US data for the week includes fourth-quarter gross domestic product figures on Thursday, as well as core personal consumption expenditures on Friday. There will also be earnings from US firms to consider, with highlights including Netflix on Tuesday and Tesla on Wednesday.

While the Fed is almost unanimously expected to leave interest rates on hold this month, investors will be focusing on any indicators of when rate cuts will begin. According to CME's FedWatch tool, the likelihood of a once all-but-assured 25 basis point rate cut in March is now considered to stand at just 44%, with a 55% likelihood that rates are left unchanged.

Sterling was quoted at USD1.2721 early Monday, higher than USD1.2669 at the London equities close on Friday. The euro traded at USD1.0908, higher than USD1.0884. Against the yen, the dollar was quoted at JPY148.02, down versus JPY148.18.

In China, the Shanghai Composite was down 2.2%, while the Hang Seng index in Hong Kong was down 2.8%.

China's central bank left its key interest rates unchanged on Monday, as expected by the market.

The People's Bank of China maintained the one-year loan prime rate, which serves as a benchmark for corporate loans, at 3.45%. It had been cut from 3.55% in August, in an attempt to counter the post-Covid growth slowdown in the world's second-largest economy.

The five-year loan prime rate, which is used to price mortgages, was also held at 4.2%, having been cut by 10 basis points in June.

In Japan, the Nikkei 225 index in Tokyo was closed up 1.6%.

Sony closed up 1.9%, after confirming it has pulled out of a USD10 billion merger of its Indian operations with local rival Zee Entertainment Enterprises.

The tie-up was aimed at helping both firms compete with streaming rivals like Walt Disney, Amazon and Netflix in the vast and booming entertainment market of 1.4 billion people. Sony cited conditions of the merger agreement not being met as the reason for the decision.

The S&P/ASX 200 in Sydney closed up 0.8%.

Gold was quoted at USD2,023.98 an ounce early Monday, lower than USD2,035.35 on Friday. Brent oil was trading at USD78.29 a barrel, lower than USD79.06.

In the economic calendar on Monday, there are no major releases scheduled.

The local corporate calendar has a trading statement from advertising agency S4 Capital.

By Elizabeth Winter, Alliance News deputy news editor

Comments and questions to newsroom@alliancenews.com

Copyright 2024 Alliance News Ltd. All Rights Reserved.