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LONDON (Alliance News) - UK shares are set to open lower Friday, as a third consecutive negative close in the Dow 30 and S&P 500 and weak economic data from China are expected to weight on European major indices.
China's manufacturing sector contracted again in July and at an accelerated pace, the latest survey from Caixin revealed on Friday, with a flash purchasing manager's index score of 48.2. That marked a 15-month low score, and it was well shy of forecasts for a score of 49.7. It was down sharply from 49.4 in June, and it moves further beneath the boom-or-bust line of 50 that separates expansion from contraction.
In Asia on Friday, the Japanese Nikkei 225 trades down 0.5%. In China the Hang Seng is down 0.9%, but the Shanghai Composite is up 0.8%.
Wall Street ended lower Thursday, with the DJIA down 0.7%, the S&P 500 down 0.6% and the Nasdaq Composite down 0.5%. Thursday was a busy day in terms of earning reports in the US, with tech giants Amazon.com and AT&T issuing updates, among others.
Online retailer Amazon.com said Thursday after the US stock markets closed that it swung to a second quarter profit, as sales surged 20%. The company's quarterly earnings came in as a surprise for Wall Street analysts who were expecting the company to report a loss. The company also gave an upbeat sales forecast for the current quarter.
For the second quarter ended June 30, 2015, the Seattle, Washington-based company reported net income of USD92 million, compared to a net loss of USD126 million for the year-ago quarter. Before this, Amazon had posted quarterly profit just once in the last four quarters.
Meanwhile, AT&T on Thursday reported a decline in second-quarter profit, hurt by one-time expenses while revenues inched up on the back of customer additions, partly offset by a stronger dollar.
IG says futures indicate the FTSE 100 to open 28 points lower Friday at 6,626.60 points. The index closed down 0.2% at 6,655.01 on Thursday.
In a busy UK corporate calendar Friday, Vodafone Group issues a first-quarter interim management statement, while Pearson, Anglo American, Beazley and Hammerson release half-year results. Volex publishes a first-quarter interim management statement, and Close Brothers Group issues a trading update, while Helical Bar releases an interim management statement, Lonmin issues a third-quarter interim management statement and production report, and AG Barr provides a trading update.
In the economic calendar, manufacturing and services PMIs for France, Germany and the eurozone are expected at 0800 BST, 0830 BST and 0900 BST, respectively. In the US, manufacturing PMI is due at 1445 BST and new home sales are due at 1500 BST.
By Daniel Ruiz; danielruiz@alliancenews.com
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