FTSE 100 expected to head lower as markets take a breather

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6.50am: Time for a breather

The FTSE 100 is expected to start Wednesday’s session on the back foot as global markets look set to take a breather following a strong performance on Tuesday.

Spread-betters IG are forecasting that the FTSE 100 will start down around 21 points after ending Tuesday’s session 118 points higher at 6,384.

Predictions of a lower start in London followed a positive performance in the US overnight, which saw the Dow Jones Industrial Average close up 0.63% at 29,823 while the Nasdaq Composite rose 1.28% to a record close of 12,355 and the S&P 500 climbed 1.13% to also end at a record high of 3,662.

The surge was partially attributed to renewed efforts by politicians in Washington DC to restart economic stimulus talks after negotiations stalled ahead of November’s general election.

“Yesterday a group of bipartisan politicians put forward a US$908bn relief package. One Senator described it as an ‘interim’ proposal. In advance of the Presidential election, Nancy Pelosi of the Democrats and Mitch McConnell of the Republicans were very far apart with regards to working out a package. Pelosi was pushing for a US$2.2 trillion scheme, while McConnell was driving for a US$500bn programme. Yesterday, McConnell talked about a US$1.4 trillion package so things seem to be heading in the right direction”, said David Madden at CMC Markets.

Asian markets were more mixed on Wednesday following the rally on Wall Street, with Japan’s Nikkei 225 up 0.07% while Hong Kong’s Hang Seng dropped 0.35%.

On currency markets, the pound was relatively flat against the dollar at around US$1.342, with any news on Brexit negotiations and the possibility of a last-minute trade deal likely to be the main driver of any movement.

The US ADP jobs report later today may provide a catalyst for movement should the figures apply pressure to the dollar.

Around the markets:

  • Sterling: US$1.342, unchanged
  • Brent crude: US$47.10 a barrel, down 0.7%
  • Gold: US$1,812 an ounce, unchanged
  • Bitcoin: US$18,813, down 3.6%

6.45am: Early Markets – Asia/Australia

Asia-Pacific shares were mostly higher on Wednesday as Australia’s economy expanded 3.3% quarter-on-quarter in September after a 7% quarter-on-quarter contraction in the June quarter.

Australian shares were marginally up, with the S&P/ASX 200 closing 0.03% higher.

Chinese stocks were higher with Shanghai composite rising 0.12% while Hong Kong’s Hang Seng index dipped 0.07%.

In South Korea the Kospi gained 1.60% and Japan’s Nikkei 225 rose 0.05%.

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Proactive Australia news:

Peninsula Energy Ltd (ASX:PEN) sees a clear pathway to restart uranium production at its flagship Lance Project in Wyoming, USA, which is the only US-based uranium project authorised to use the industry-leading, low-cost, low pH In-Situ Recovery (ISR) process.

Chalice Gold Mines Limited (ASX:CHN) has received firm commitments for a $100 million placement to sophisticated, professional and institutional investors.

Pan Asia Metals Ltd (ASX:PAM) plans to start drilling the Doyenwae prospect within Minter Tungsten Project in New South Wales after receiving State Government approval for a six-hole reverse circulation (RC) drilling program of 1000-1200 metres.

Australian Vanadium Ltd (ASX:AVL) (OTCMKTS:ATVVF) (FRA:JT71) has signed a non-binding Memorandum of Understanding (MOU) with US Vanadium LLC (USV) in relation to offtake from the Australian Vanadium Project in Western Australia.

Aeris Resources Ltd’s (ASX:AIS) second drill hole at Anomaly K target within the tenement package comprising the Tritton operations in New South Wales has intersected a 3.4-metre zone of massive sulphides.

Kingston Resources Ltd (ASX:KSN) reverse circulation (RC) drilling at its 75%-owned Livingstone Gold Project in WA has returned high-grade assay results of up to 17 metres at 3.07 g/t from the Homestead prospect.

Nexus Minerals Ltd (ASX:NXM) (FRA:YAK) has completed the tenement sale of its Triumph Gold Project to Gibb River Diamonds Ltd (ASX:GIB) (FRA:PHO)

Piedmont Lithium Ltd (ASX:PLL) (NASDAQ:PLL) has awarded the definitive feasibility study for its planned spodumene concentrate operations in North Carolina, USA, to a combined team including Primero Group and Marshall Miller & Associates.

Creso Pharma Limited (ASX:CPH) (OTCMKTS:COPHF) (FRA:1X8) has received three new purchase orders for its anibidiol® line of animal health products totalling CHF277,000 (A$414,000).

Zelira Therapeutics Ltd (ASX:ZLD) (OTCQB:ZLDAF) (FRA:G1G), in partnership with SprinJene®, a leader in natural oral care products, has launched its first over-the-counter (OTC) proprietary CBD toothpaste in the US.

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