Lack of G20 agreement is likely to affect shares

THE autumn rally in stocks hit the buffers last week. Expectations of an interest-rate hike in China hit commodity prices, in turn leading energy and natural resources stocks to trade lower. This, along with the resurfacing of sovereign debt problems in Europe, caused leading stock markets to break their five-week winning streak.

With the absence of any meaningful accord emanating from the weekends G20 summit, weaker sentiment is likely to spread into today’s European open.

GFT is quoting the FTSE 100 index to open 14 points off from Friday’s close, at a level of 5,783. The German DAX 30 is expected to open 25 points lower, at 6,710, and the French CAC 40 lower by 20 points, at 3,811.

Economic data scheduled for this week includes inflation figures for the UK, Eurozone and the US. Tomorrow sees the release of the influential ZEW index in Germany and industrial production figures from the US.

In the states, the focus is likely to fall on the retail sector, with today’s retail sales figures, and then throughout the week with earnings updates from Wal-Mart, Lowe’s, Home Depot and Target.

Mark Outen is a senior dealer for GFT Global Markets UK.