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FTSE 100 to retreat early doors despite US rally yesterday

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UK stocks look set to take their lead from Asian markets rather than the US and open lower.

The FTSE 100 is expected to open just shy of 100 points lower at 6,430.

In another eventful day on US markets, in which the focus was once again on hot stock GameStop, the Dow Jones shot up 300 points to close at 30,603 and the S&P 500 leapt 37 points to 3,787.

The tech-heavy Nasdaq Composite, weighed down by laggards Apple and Tesla after Wednesday night trading updates, looked less sprightly in comparison, rising 66 points to to 13,337.

“While the main focus remained on GameStop, the airline sector became a focal point after American Airlines surged sharply on the US open after it was identified on Reddit as the most heavily shorted US airline stock,” reported CMC’s Michael Hewson.

“This surge in US airlines prompted a similarly sharp snap-back in European airline stocks with the likes of EasyJet, IAG and Lufthansa all posting strong gains.

“Not unexpectedly all of this volatility has attracted the attention of not only the regulators, who appear content to remain watchful for now, but also politicians on Capitol Hill, who keen to score political points, were keen to criticise some of the trading halts that were seen yesterday. Nonetheless, it is clear that US politicians will want to have a look at the events of the last few days in order to discover what exactly went on, as GameStop closed down 44%, its first decline in six days,” he added.

In Asian markets this morning, the Nikkei 225 is off 486 points at 27,711 in Japan and the Hang Seng is down 141 points at 28,410 in Hong Kong.

“Today’s focus is the EMA [European Medicines Agency] meeting which is set to discuss (and approve) the AstraZeneca vaccine. This got another layer of interest as Germany has said that they will not use it for the 65y+ age group, as rumoured by Handelsblatt earlier this week,” said Danske Bank in its morning preview notes.

“Positive news on the vaccine front, however, is that both the Moderna and Pfizer vaccines appear effective against the British and South African mutations,” it added.

“The US biotech company Novavax yesterday reported that its product has an efficacy of close to 90% in phase 3 trials, however, is less effective towards the South African variant,” Danske Bank said.

On the London stock market, it is set to be a typically quiet Friday, with trading updates from blue-chip miners Evraz PLC (LON:EVR) and Polymetal International PLC (LON:POLY) taking up a large portion of the diary.

There will also be an update from Paragon Banking Group PLC (LON:PAG) and interim results from Real Good Food PLC (LON:RGD), while over in the US investors may be eyeing earnings news from oil giant Chevron Corp (NYSE:CVX) and pharma firm Eli Lilly & Co (NYSE:LLY).

Around the markets

  • Sterling: US$1.3701, down 0.2 cents
  • 10-year gilt: 0.292%, up 2.34 basis points
  • Gold: US$1,844.80 an ounce, up US$6.90
  • Oil: US$55.07 a barrel, down 3 cents
  • Bitcoin: US$32,791, down US$483

6.45 am: Early Markets: Asia / Australia

Stocks in Asia-Pacific were lower today, with South Korea’s Kospi leading the losses with a fall of 2.6%.

Japan’s Nikkei 225 dropped 1.89% while the Shanghai composite in China slipped 1.62%.

Hong Kong’s Hang Seng index dipped 0.92% while Australia’s S&P/ASX 200 closed 0.64% lower.

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Proactive Australia news:

Australian Potash Ltd (ASX:APC) is poised for a robust year ahead banking on the numbers of steps taken by the company in the December quarter for the development of its 100%-owned Lake Wells Sulphate of Potash Project (LSOP) in Western Australia.

Poseidon Nickel Ltd (ASX:POS) (FRA:NYG1) continued its focus on progressing the Golden Swan high-grade nickel sulphide discovery at its Black Swan Project over the December 2020 quarter.

Theta Gold Mines (ASX:TGM) (OTCQB: TGMGF) has highlighted its strategy to become a high-growth gold producer at the Mines & Money Online Connect Precious Metals webinar, a three day event showcasing 60 leading mining companies between January 27 – 29.

Artemis Resources Ltd (ASX:ARV) is set to kick-start diamond drilling at the Carlow Castle Gold-Copper-Cobalt Project in late January to finish 1,000 metres within the eastern mineral resource area in Western Australia.

European Lithium Ltd (ASX:EUR) (FRA:PF8) (VSE:ELI) (NEX:EUR) is on schedule to achieve another key milestone of the definitive feasibility study (DFS) at its advanced Wolfsberg Lithium Project in Austria.

Venture Minerals Ltd (ASX:VMS) has completed a share placement to sophisticated, professional and institutional investors to raise A$10 million, fully funding the development of the Riley Iron Ore Project in northwest Tasmania and paving the way for the first iron ore shipment next quarter.

Oklo Resources Ltd (ASX:OKU) continued to advance its flagship Dandoko Project in Mali, West Africa, with resource definition drilling at the Seko deposit commencing during the December quarter.

Aeris Resources Ltd (ASX:AIS) is gearing up for a memorable year ahead in the wake of measures taken by the company to make new copper discoveries at its Tritton Copper operations in New South Wales along with an updated mineral resource at its Cracow Gold operations in Queensland.

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