(Alliance News) - Blue-chip stocks in London are set on Monday to fall back from a record high, after a hot US jobs print stoked fear of larger interest rate hikes by the Federal Reserve.
IG says futures indicate the FTSE 100 index of large-caps to open down 28.2 points, 0.4%, at 7,873.6 on Monday. The FTSE 100 index closed up 81.64 points, or 1.0% at 7,901.80 on Friday - a record for the index and the highest since 2018.
In the US on Friday, stocks Wall Street struggled following the jobs figures. The Dow Jones Industrial Average ended down 0.4%, the S&P 500 down 1.0% and the Nasdaq Composite down 1.6%.
According to the Bureau of Labor Statistics, US nonfarm payrolls rose by 517,000 in January, almost double the 260,000 seen December. January's number was well-ahead of the consensus of 185,000, according to FXStreet.
"The sharp stock market sell-off on Friday wasn't enough to stop US and European markets from posting another positive week, and to see the FTSE 100 post a new record high, due to a slide in the value of the pound, but it was a warning shot to markets that fears over a US recession are currently overblown," said CMC Markets UK chief market analyst Michael Hewson.
The dollar continued to firm early Monday in London.
Sterling was quoted at USD1.2057, lower than USD1.2093 at the London equities close on Friday. The euro traded at USD1.0788, soft against USD1.0844. Against the yen, the dollar was quoted at JPY131.88, firming from JPY130.94.
In Asia on Monday, the Nikkei 225 index closed up 0.7%. In China, the Shanghai Composite was down 0.9%, while the Hang Seng index in Hong Kong was down 2.3%. The S&P/ASX 200 in Sydney closed down 0.3%.
"Asia stocks are suffering from the intense NFP hangover and getting further hit after the Biden administration decided to postpone Secretary of State Antony Blicken's upcoming trip to China in light of popped balloons," said SPI Asset Management's Stephen Innes.
A US decision to shoot down a Chinese balloon that Beijing claimed had veered off course has "seriously impacted and damaged" relations between the two countries, China's foreign ministry said on Monday.
The aircraft, which Washington said was a spy balloon, had spent several days flying over North America, leading the US to call off a planned visit to Beijing by Blinken.
Washington on Saturday said a fighter jet had shot it down off the coast of South Carolina, because of what it called Beijing's "unacceptable violation" of American sovereignty.
Beijing protested the move, claiming the balloon was a civilian aircraft that was blown off course.
Gold was quoted at USD1,877.32 an ounce early Monday, up from USD1,867.11 on Friday. Brent oil was trading at USD80.16 a barrel, lower than USD81.44.
In Monday's UK corporate calendar, there's a trading statement from Plant Health Care and full-year results from BlackRock Throgmorton Trust.
In the economic calendar on Monday, there is the UK construction purchasing managers' index at 0930 GMT, before EU retail trade data at 1000 GMT.
The UK's construction sector is expected to remain in a marginal state of contraction in January, though the deterioration is forecast to ease from December.
The PMI is forecast to rise to 49.5 points, according to FXStreet-cited market consensus, from a reading of 48.8 in the final month of 2022.
By Elizabeth Winter, Alliance News senior markets reporter
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