London stocks are expected to edge higher on Thursday as investors monitor developments surrounding the Strait of Hormuz while digesting another busy day of corporate earnings.
Futures indicate the FTSE 100 will open around 11 points higher, or 0.1%, at 10,898.70, after the index closed 0.1% higher at 10,888.30 on Wednesday.
Iran and Oman have agreed a shipping route through the Strait of Hormuz and are finalising arrangements to jointly manage the strategic waterway. However, Tehran said any full reopening remains dependent on the US ending what it describes as a naval blockade of Iranian ports.
The prospect of easing tensions continued to weigh on oil prices, with Brent crude slipping to US$79.13 a barrel, down from US$79.47 at Wednesday’s close.
Wall Street delivered a mixed performance overnight. The Dow Jones gained 0.5%, while the S&P 500 eased 0.2% and the Nasdaq fell 0.8% as technology stocks came under pressure.
Asian markets were also mixed. Japan’s Nikkei 225 fell 0.8%, Hong Kong’s Hang Seng declined 1.8%, and China’s Shanghai Composite edged 0.1% lower. Australia’s S&P/ASX 200 rose 0.4% after the country’s trade balance unexpectedly returned to surplus in June.
In currency markets, sterling eased slightly to US$1.3461, while the euro strengthened to US$1.1549. Gold extended its rally to US$4,265.90 an ounce.
Investors will also be watching a packed corporate diary featuring results from Diageo, Persimmon, Admiral, Hikma Pharmaceuticals, WPP and Wizz Air.
On the economic front, attention will focus on UK construction PMI data, alongside eurozone retail sales, German factory orders and US weekly jobless claims.
