Financial bookmakers are projecting the FTSE 100 to open slightly higher after rallying 47 points (0.8 percent) in yesterday’s session. The UK’s blue chip index is set to open at 5,762, up four points from Monday’s close.
Demand for equities got a boost from weaker than expected Chinese manufacturing data, which increased the likelihood of more stimulus action from the government.
Expectations of further monetary easing from the People’s Bank of China and other central banks offset the negative impact of a downbeat note from Moody’s.
The credit rating agency has reduced its outlook for the EU’s rating to ‘negative’ and said it could eventually be stripped of its top-notch AAA rating.
In other news in Europe, president of the European Central Bank Mario Draghi said the bank could buy bonds on the secondary markets to bring down borrowing costs in the euro zone. He said this would not be against the rules as buying bonds with a maturity of up to three years would not constitute state financing by the ECB.
“Based on this, it is not a stretch to suggest that the euro's reaction to the ECB's press conference on Thursday will be largely determined by the range of bonds declared eligible for purchase under the new programme,” said chief market strategist at IG Group Chris Weston.
Today’s macroeconomic calendar will include the Institute for Supply Management’s (ISM) US manufacturing index for August and construction spending data for July from the Commerce Department.
Asian markets were in selling mode today. Japan’s Nikkei 225 index was 22 points (0.25 percent) at 8,761 late in the session and China’s Shanghai Composite Index fell six points (0.3 percent) to 2,053.
The US markets were closed for the Labour Day holiday yesterday.