London stocks were expected to rebound slightly on Wednesday as investors prepared for a busy round of final purchasing managers’ index releases, while tensions in the Middle East continued to escalate.
Futures suggest the FTSE 100 will open about 46 points, or 0.4%, higher on Wednesday. The previous session saw the index tumble 296 points, or 2.8%, to close at 10,484.13. Losses across continental Europe were even steeper, with benchmark indices in Frankfurt, Paris, Madrid and Milan falling between 3.5% and 4.5%.
In currency markets, sterling rose to USD1.3336 early Wednesday from USD1.3305 at the close of London trading on Tuesday. The euro also strengthened to USD1.1614 from USD1.1585, while the US dollar slipped against the yen to JPY157.43 from JPY157.80.
On Wall Street, losses moderated later in the session but US equities still closed lower. The S&P 500 finished down 0.9%, slipping below its 100-day moving average for the first time since November. The Dow Jones Industrial Average declined 0.8%, while the Nasdaq Composite dropped 1%.
Asian markets were again under pressure on Wednesday. Japan’s Nikkei 225 dropped 3.8%. In China, the Shanghai Composite slipped 0.8%, while Hong Kong’s Hang Seng Index fell 2.8%. Australia’s S&P/ASX 200 ended the session down 1.9%.
Oil prices also continued to climb, with Brent crude rising above $83 a barrel. Donald Trump said the US Navy could escort oil tankers through the Strait of Hormuz if necessary, a vital waterway through which roughly one-fifth of the world’s oil supply passes. Washington has also moved to provide insurance support for shipping in the region.
In currency markets the US dollar strengthened by 0.7%, while gold held relatively steady at around $5,133 an ounce.
