(Alliance News) - Stocks in London are set to open higher on Wednesday, as investors look to UK inflation data, with markets in Asia and New York given a boost from strong Chinese data and a cooler-than-expected US inflation print.

IG says futures indicate the FTSE 100 to open up 18.3 points, 0.2%, at 7,458.77 points on Wednesday.

The index of London large-caps closed up 14.64 points, 0.2%, at 7,440.47 on Tuesday, underperforming European indices. The DAX 40 in Frankfurt and the CAC 40 in Paris closed up 1.8% and 1.4% respectively.

US consumer price inflation slowed by more than expected last month, data showed, putting pressure on the dollar, with investors all but assured the Federal Reserve has already enacted its final interest rate hike for this cycle of monetary tightening.

According to the Bureau of Labor Statistics, the consumer price index rose by 3.2% in October from a year before, slowing from a 3.7% increase in September. The inflation rate had been expected to cool only to 3.3%, according to FXStreet-cited market consensus.

The core annual inflation rate eased to 4.0% in October from 4.1% in September, a pace it had been expected to maintain last month. Consumer prices were unchanged in October from September, falling short of the 0.1% monthly growth prediction, and cooling from the 0.4% rise in September from August.

"You can forget about a December Fed hike when taken with the softer jobs report and misses on both ISM gauges for October. It's off the table," said SPI Asset Management's Stephen Innes.

Sterling was quoted at USD1.2488 early Wednesday, higher than USD1.2475 at the London equities close on Tuesday. The euro traded at USD1.0873, up from USD1.0855. Against the yen, the dollar was quoted at JPY150.71, down versus JPY150.85.

There is UK inflation data due shortly, which is expected to show a dramatic slowdown in the pace of price rises as energy inflation cools markedly.

The headline annual rate is expected to cool to 4.8% in October, according to FXStreet-cited market consensus, from 6.7% in September. Core inflation is expected at 5.8%, slowing from 6.1%.

If the forecasts materialise, it will mean Prime Minister Rishi Sunak has achieved his goal of halving inflation to below 5.4% this year.

In the US on Tuesday, Wall Street rallied, with the Dow Jones Industrial Average up 1.4%, the S&P 500 up 1.9% and the Nasdaq Composite 2.4%.

In Asia on Wednesday, there was also some positive economic data from the region's largest economy spurring risk sentiment.

Chinese retail sales grew by more than expected, boosted by an extended holiday at the start of the month. Retail sales jumped 7.6% on-year in October, according to the National Bureau of Statistics, up from September's 5.5% and the highest growth since May. It was ahead of the market consensus of 7.0%, as cited by FXStreet.

Meanwhile, industrial production growth in October crept up to 4.6%, beating forecasts that it would mean unchanged from September's 4.5%.

In China, the Shanghai Composite was up 0.4%, while the Hang Seng index in Hong Kong surged 3.3%. The S&P/ASX 200 in Sydney closed up 1.4%. The Nikkei 225 index in Tokyo closed up 2.6%.

Japan's economy shrank by 0.5% between June and September compared to the second quarter, the preliminary data showed, worse than the consensus forecast of minus 0.1%.

The drop, which followed two straight quarters of growth, was on the back of continued low consumer spending and weakness in the global economy hitting Japan's exports.

Gold was quoted at USD1,967.52 an ounce early Wednesday, slightly higher than USD1,964.57 on Tuesday.

Brent oil was trading at USD82.90 a barrel, down from USD83.42.

Wednesday's economic calendar has UK inflation data at 0700 GMT, eurozone industrial production at 1000 GMT and a US producer price index at 1330 GMT.

The local corporate calendar has half-year results from utility firm SSE and pub company Fuller, Smith & Turner.

By Elizabeth Winter, Alliance News senior markets reporter

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