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LONDON (Alliance News) - Stock prices in London are seen opening lower on Thursday with the FTSE 100 index hindered by a stronger pound ahead of the Bank of England's interest rate announcement at midday.
IG futures indicate the FTSE 100 index will open 40.50 points lower at 7,087.60. The blue-chip index closed up 1.3%, or 92.25 points, at 7,128.10 on Wednesday.
Sterling was higher, quoted at USD1.2866 against USD1.2757 at the London equities close on Wednesday, ahead of the rate decision.
The pound rose after Brexit Secretary Dominic Raab indicated he expected an EU withdrawal deal finalised by November 21 on Wednesday, only for his department to later insist there was no set date. Raab set off a flurry of speculation when he appeared to suggest a Brexit agreement could be done within three weeks.
"We have heard this sort of talk before, but hopes were raised on the back of the announcement. There was a little backtracking, and now a ministry spokesperson is claiming no end date has been set. It was reported that the UK and EU negotiators have struck a tentative deal over financial services," said David Madden, market analyst at CMC Markets.
In a letter to the House of Commons Exiting the EU Committee, Raab wrote: "I would be happy to give evidence to the committee when a deal is finished and currently expect November 21 to be suitable."
Meanwhile, the Bank of England will announce its latest monetary policy decision, alongside the release of the Monetary Policy Committee meeting minutes and quarterly Inflation Report, at midday on Thursday, on what has come to be known as 'Super Thursday'.
This will be followed by a press conference with BoE Governor Mark Carney at 1230 GMT.
With a Brexit withdrawal deal still not agreed, the Bank of England is expected to remain cautious, with the next UK interest rate hike still not seen until the second quarter of 2019.
The UK corporate calendar on Thursday has half-year results from telecommunications firm BT Group. There are also third-quarter results from oil major Royal Dutch Shell, speciality chemicals company Croda International, online takeaway platform Just Eat, medical-devices maker Smith & Nephew, drugmaker Indivior and gold miner Centamin.
The economic events calendar on Thursday has UK Nationwide housing price readings at 0700 GMT, UK manufacturing PMI at 0930 GMT and US manufacturing PMI at 1345 GMT.
In early UK corporate news, BHP Billiton confirmed it will return its US shale proceeds via both a special dividend and a buyback.
In July, London FTSE 100 and JSE Top 40 member BHP sold its US shale assets for USD10.8 billion to oil major BP and Merit Energy, with BP taking the vast majority. The deal completed on Wednesday.
The miner will start straight away with a buyback worth USD5.2 billion, and, once this is done, will return an expected USD5.2 billion in a special dividend to be paid in January.
In the US on Wednesday, Wall Street ended higher, with the Dow Jones Industrial Average up 1.0%, S&P 500 up 1.1% and Nasdaq Composite up 2.0%.
In the US earning calendar broadcaster CBS, tomato ketchup maker Kraft Heinz, coffee house chain Starbucks and iPhone maker Apple will report earnings after the closing bell in New York on Thursday.
The Japanese Nikkei 225 index closed down 1.1%. In China, the Shanghai Composite is up 0.3%, while the Hang Seng index in Hong Kong is up 1.6%.
China's manufacturing sector expanded only slightly in October as output remained broadly unchanged amid marginal increase in new business, survey data from IHS Markit showed Thursday.
The Caixin Purchasing Managers' Index came in at 50.1 in October versus 50.0 in September. The reading was expected to remain unchanged at neutral level of 50.0.
A score above 50 indicates expansion. Prior to September, the health of the sector had improved for 15 consecutive months.
