FTSE LIVE: Markets hurt by worries over global growth; second Q2 GDP reading released

| August 24, 2012 | 0 Comments

By
This Is Money Reporters

02:07 EST, 24 August 2012


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02:15 EST, 24 August 2012

The FTSE 100 edged lower this morning on doubts over possible new stimulus measures from major central banks, such as the U.S. Federal Reserve, to fight the global economic slowdown.

The blue-chip index was down by 0.2 per cent, or 9.10 points lower, at 5,767.50 points as markets opened.

Investors scaled back expectations of strong stimulus measures from the Federal Reserve, such as a third round of quantitative easing known as ‘QEIII’, after Fed official James Bullard said yesterday that U.S. data had been somewhat better since early this month.

The UK blue chip index closed up 2.40 points, or 0.04 per cent higher, on Thursday at 5,776.60 points.

The UK blue chip index closed up 2.40 points, or 0.04 per cent higher, on Thursday at 5,776.60 points.

‘My view is that we’re not going to
see QEIII and if we do see it, it will be pretty mild and the market
could sell off,’ said JN Financial senior trader Adrian Redmond, adding
that he expected the FTSE to trade within a tight 100 point range over
the coming week.

‘We’re just going to be in a very
narrow range over the next week. I can’t see us moving much on either
side of 5,700 and 5,800,’ he said.

PREVIEW:

The FTSE 100 is seen opening down by 8
to 10 points, or as much as 0.2 per cent lower, according to financial
bookmakers, hurt by worries over global growth and as investors scale
back expectations of a new round of stimulus from the Federal Reserve
following comments made by a Fed member.

The UK blue chip index closed up 2.40 points, or 0.04 per cent higher, on Thursday at 5,776.60 points.

U.S. Federal Reserve official James Bullard yesterday leaned against the impression that the U.S. central bank was locked into easing monetary policy at its meeting next month, noting that economic data had improved in recent weeks.

However, on Friday Fed Reserve official Charles Evans said the U.S. central bank should take action to bring down unemployment, including by buying more bonds.

Asian shares retreated from a two-week high today as investors scaled back their expectations of strong stimulus from the U.S. Federal Reserve and fretted about economic growth after manufacturing surveys from the eurozone and China depicted a bleak outlook.

Copper today retreated from one-month highs hit the session before, as hopes faded for more stimulus from the U.S. Federal Reserve and on signs Spain could need a full sovereign bailout.

The second reading for British Q2 GDP will be released at 0830 GMT this morning, with readings of -0.5 per cent for the quarter, and -0.6 per cent on an annualised basis forecast, against initial figures of -0.7 percent for the quarter and -0.8 per cent year-on-year.

July U.S. durable goods orders, due at 1230 GMT, will be the only U.S. economic data of importance on Friday.

SHARES TO WATCH TODAY

RIO TINTO : The positive long-term outlook for copper remains intact, the head of the miner’s copper division said today, adding his voice to a chorus of mining executives reluctant to call time on the resources boom.

AVIVA : The insurer may cut as many as 800 jobs at its UK business in a cost-cutting drive, media reported.

BERENDSEN : The textiles laundry and maintenance company reports first-half results.

STAGECOACH : The transport company holds its annual general meeting.

AGA RANGEMASTER GROUP : The cookers and kitchen products company posts first-half results.

HENRY BOOT : The property and construction company posts first-half results.

Filed Under: finance news

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