FTSE 100 set for modest recovery after plunge as US tech earnings provide a fillip

The FTSE 100 index is expected to open higher on Friday, consolidating after the previous sessions sharp falls as US and Asian markets also remain on tenterhooks amid worries over a second wave of the coronavirus outbreak but with some upbeat earnings from US tech giants providing underlying support.

Spread betting firm CMC Markets expects the blue-chip index to open around 18 points higher at 6,008, having dived by 114.87 points on Thursday to end at 5,989.99.

Overnight in New York, the Dow Jones Industrials Average closed down over 225 points, or 0.9% at 26,313.65, while the broader S&P 500 index shed 0.4%.

But the Nasdaq Composite managed to gain 0.4% with all eyes on a trio of results from West coast-based tech giants Apple Inc (NASDAQ:AAPL), Amazon Inc (NASDAQ:AMZN), and Facebook Inc (NASDAQ:FB) which were released after the close in New York.

This Nasdaq optimism turned out to be well-founded as Apple, Amazon and Facebook all smashed expectations with their latest quarterly numbers. Apple also announced a 4 for 1 stock split, while posting its best-ever Q3 performance noted CMC Markets (UK) senior analyst Michael Hewson.

“These impressive results will only serve to widen the divide between these huge tech behemoths and the rest of the underlying US market; however, they look set to ensure that US markets start the last day of the week and the month higher when they open later today.”

However, he added: “The same cant be said for todays Asia session which has seen a big fall in the Nikkei 225, which appears to have taken its cues from the weaker than expected US jobless claims data, amidst concerns over a second wave. The latest China manufacturing and services PMI numbers for July were a mixed bag, with a modest increase in manufacturing PMI to 51.1, however, services softened a little to 54.2.”

Overall Asian stock markets were mixed on Friday, Japans Nikkei 225 nursing a 2.3% drop and Chinas blue-chip Shanghai index down 0.3%, but Hong Kongs Hang Seng index edged 0.1% higher.

European GDP, UK blue-chip earnings flow

CMC's Hewson continued: “European markets certainly dont look like they will see much of a benefit from last nights blow out US tech earnings, after yesterdays sharp falls, with todays main focus set to be on the release of the first iterations of France Q2 GDP, which is expected to see a contraction of -15.2%, Italy Q2 GDP, a -15.5% contraction, Spain a -16.6% contraction and EU Q2 GDP -12.1%.

“None of these numbers should be viewed with too much surprise, but they will still be viewed through a lens of how much of this lost activity can be pulled back by the end of the year.”

“Given the concerns about rising infection rates, travel bans, lockdowns and quarantines that are being imposed there is a concern that we could see further economic downside to some of the annualised GDP estimates, unless these virus spikes are stamped out,” Hewson concluded.

Aside from the European data, even though it might be the end of a busy week, the UK corporate results spigot is hardly slowing, with another big batch of blue-chip updates on the agenda, including trading announcements: BT Group PLC (LON:BT.A) and Glencore PLC (LONRead More – Source

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