Investors will be watching British stocks today, amid a rise in coronavirus cases, with hopes of the economic releases scheduled for today providing some relief to the markets.
Context: UK shares closed lower on Tuesday, following a decline in one of FTSE 100’s most important stocks, HSBC, and a higher pound.
Details: UK stocks weakened in Tuesday’s trading, as HSBC’s shares plummeted more than 6% after the bank announced plans to cut 35,000 jobs. The announcement follows HSBC’s massive 53% decline in profits last year.
Glencore’s shares also contributed to the wider market decline, with the stock trading lower by 4% after the company posted a loss for 2019. The heavyweight also reported the writing down of $2.8 billion in coal, oil and copper assets. Mining sector shares followed the weakness in Glencore’s stock, with Evraz and BHP Group shedding more than 3% each.
The UK released various economic reports yesterday, with some data pointing towards weakness in the economy. Although the jobless rate remained unchanged at 3.8% in the three months to December, wage growth increased at its slowest pace since the three months to August 2018. Labour productivity rose 0.3% in the last quarter of 2019, versus a 0.4% increase in the earlier period.
The rise in the British pound also weighed on the UK stock market, with the sterling recovering losses against the US dollar on Tuesday. The pound gained 0.3% versus the greenback to $1.3044. Britain’s stocks also responded to the general decline in global markets after Apple issued a revenue warning related to the coronavirus outbreak.
China announced a rise in coronavirus deaths on Tuesday, with 1,749 new cases and 136 more deaths reported on February 18.
Why it matters: After a weak performance in Tuesday’s session, all eyes are on the bunch of economic data scheduled for release today, including inflation rate, producer prices and retail prices. Investors will also keep a close eye on various economic reports from Europe and the US.
What to watch: UK consumer prices, which were flat in December, are likely to fall 0.4% month-over month in January. Preliminary estimates show a rise in the core inflation rate to 1.5% in January, from 1.4% in December. UK core producer prices are expected to rise 0.1% in January, after having fallen 0.1% in December. Analysts expect the retail price index to decline 0.6% in January, versus a 0.3% rise in December.
Other Markets: Most US indices closed lower on Tuesday, with the Dow and S&P 500 down 0.56% and 0.29%, respectively. The Nasdaq 100 defied the downward trend and edged higher by 0.02%.