(Alliance News) - Stocks in London are set to open higher on Friday, following a better performance on Wall Street.

IG says futures indicate the FTSE 100 to open up 20.6 points, 0.3%, at 7,479.69 on Friday. The index of London large-caps closed up 12.80 points, 0.2%, at 7,459.09 on Thursday. However, it is still likely to close in the week in the red, currently down 2.0% since Monday.

"Yesterday saw a modest stabilisation in European markets after 3-days of losses, although the performance of the FTSE 100 left a lot to be desired, lagging the rest of Europe with modest weakness in utilities and consumer staples acting as a drag on the UK blue-chip index," noted CMC Markets UK chief market analyst, Michael Hewson.

Now the focus turns to UK retail sales data for December due shortly. Hewson said the figures will be a "good indication as to whether the UK economy managed to avoid a [fourth quarter] recession".

Meanwhile, hopes of Spring interest rate cuts from central banks continue to fade. According to CME's FedWatch tool, the market is pricing in a 52% probability of a 25 basis point cut in March, with a 47% likelihood rates are left on pause. A week ago, the tool indicated a 77% chance of a cut.

Sterling was quoted at USD1.2696 early Friday, higher than USD1.2687 at the London equities close on Thursday. The euro traded at USD1.0878, higher than USD1.0867.

In the US on Thursday, Wall Street ended higher, with the Dow Jones Industrial Average gaining 0.5%, the S&P 500 up 0.9% and the tech-heavy Nasdaq Composite jumped 1.4%.

Apple jumped after being upgraded by Bank of America, while better-than-hoped results from Taiwan Semiconductor Manufacturing saw chipmakers push ahead.

In Asia on Friday, the Nikkei 225 index in Tokyo was up 1.4%, benefitting from rising tech stocks as well as a weaker yen.

Japanese consumer inflation slowed again in December due to lower electricity and gas bills, government data showed, ahead of a Bank of Japan policy decision next week.

Prices in the world's third-largest economy, excluding volatile fresh food, rose 2.3% year-on-year in December, down from 2.5% the previous month. The figure was in line with market expectations and continued a broad trend of cooling inflation over the past year, down from 4.2% in January 2023.

Although inflation remains above the Bank of Japan's longstanding two-percent target, the bank is widely expected to keep its monetary easing measures in place on Tuesday.

Against the yen, the dollar was quoted at JPY148.79, up versus JPY148.11.

In China, the Shanghai Composite was down 0.5%, while the Hang Seng index in Hong Kong was down 0.9%. The S&P/ASX 200 in Sydney closed up 1.0%.

Gold was quoted at USD2,022.36 an ounce early Friday, higher than USD2,015.55 on Thursday.

Brent oil was trading at USD78.99 a barrel, rising from USD78.61.

In Friday's UK corporate calendar, there are trading statements from promotional products marketer 4imprint, merchant bank Close Brothers, and food delivery firm Deliveroo.

The economic calendar for Friday has UK retail sales out at 0700 GMT, as well as German producer price data at the same time.

By Elizabeth Winter, Alliance News deputy news editor

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