The FTSE 100 is set to leap 0.85pc to 7,085 points this morning, after a mixed overnight session in Asian stocks that saw Japan’s Nikkei give up early gains while China’s Hang Seng pushed higher.
Meanwhile the German election has ended in gridlock, after a better-than-expected performance by outgoing chancellor Angela Merkel’s CDU. The centre-left SPD party narrowly winning the most votes , meaning they are likely to try and lead a three-party coalition alongside the Greens and one other party.
“t would be unexpected if we did get a new government before Christmas, given the last one took until February 2018 to come into any kind of focus, which means that Angela Merkel may have to stay in place for a while longer yet until her successor is appointed,” said CMC Markets chief market analyst Michael Hewson.
“What this means for German politics is that nothing much is likely to change in the short term, with investor attention likely to remain on events in China, and Asia more broadly, as well as the various supply crunches taking place across the world.”
5 things to start your day
1) Shapps’ plan to let truckers work longer hours fall flat: HGV industry says policy has failed after just one in 1,700 drivers used the scheme last month
2) Octopus takes on 580,000 stranded Avro customers: The energy company now has 3.1m customers, making it a serious challenger to traditional energy companies
3) FTSE tech listings hit all-time high since dotcom bubble: The number of tech firms on the FTSE 350 has hit a 20-year high after crashing shortly after the millennium.
4) Airport hubs braced for jobless spike: Crawley and Luton among towns facing a sharp jump in unemployment this week as Britain’s furlough scheme comes to an end.
5) One in four workers want to quit their jobs: Survey finds nearly three in 10 workers are experiencing poor well-being at work.
What happened overnight
Asian shares crept higher on Monday as risk sentiment turned for the better, though a surge in oil prices to three-year highs could inflame inflation fears and aggravate the recent hawkish turn by some major central banks.
Oil stormed past its July peaks as global output disruptions forced energy companies to pull large amounts of crude out of inventories, while a shortage of natural gas in Europe pushed costs up across the continent.
Brent added another 98 cents on Monday to $79.07 a barrel, while US crude rose 97 cents to $74.95.
MSCI’s broadest index of Asia-Pacific shares outside Japan firmed 0.5pc, though that followed three consecutive weeks of losses.
Japan’s Nikkei gained 0.4pc on hopes for further fiscal stimulus once a new prime minister is chosen. Nasdaq futures rose 0.4pc, and S&P 500 futures 0.5pc. Chinese blue chips gained 1.1oc as the country’s central bank pumped more money into the financial system and investors dared to hope Beijing would limit the fallout from the troubled China Evergrande Group.
Coming up today
- Corporate: United Utilities (Trading update)
- Economics: Durable goods orders (US)