FTSE 100 live: Markets focus on chancellor Reeves’ debut speech and France’s election

The latest updates on the FTSE 100 and London’s financial markets from City A.M.’s newsroom in the heart of the City of London.

Asian stocks faced declines on Monday morning, primarily due to significant sell-offs in Chinese shipping companies, which led to underperformance in Hong Kong’s stock market.  

The Hang Seng index dropped by 1.3 per cent, driven by a sharp 6.7 per cent decline in Orient Overseas International, a subsidiary of Cosco Shipping. Meanwhile, Japan’s Nikkei N225 remained stable near its all-time high. 

In mainland China, the CSI 300 index slipped by 0.3 per cent, marking the first time in 2024 that the index has fallen into negative territory since February. Cosco Shipping experienced notable losses, with its shares falling by over 7 per cent. 

On Wall Street, stocks closed higher on Friday, with both the Nasdaq and S&P 500 reaching record highs. Weaker-than-expected US labour market data bolstered expectations of potential interest rate cuts starting as early as September. Futures for the S&P 500 and Nasdaq showed slight declines of 0.1 per cent. 

In Europe, futures for the EURO STOXX 50 decreased by 0.18 per cent, while the FTSE 100, which had a 0.45 per cent decline on Friday, futures indicated a positive opening on Monday with a 0.11 per cent increase to 8,228.0 points. 

In currency markets, the Japanese yen strengthened by 0.2 per cent against the dollar to ¥160.38 following reports of rising wages but falling real earnings due to persistent inflation.  

Sterling continued to rise against the dollar, reaching a 3-1/2-week high, as the British currency extended its gains after the Labour Party’s significant election victory last week, ending 14 years of Conservative rule. 

The dollar index, which measures the dollar against major currencies, held steady at 104.97, recovering slightly after a 0.9 per cent decline last week exacerbated by disappointing US jobs data on Friday. 

In commodity markets, gold remained near one-month highs, trading at $2,385 per ounce.  

Oil prices edged higher due to robust summer fuel demand and concerns over potential disruptions from hurricanes in the Gulf of Mexico. Brent crude added 22 cents to reach $86.76 per barrel, while US crude oil rose by 2 cents to $83.18 per barrel. 

France is grappling with a hung parliament and coalition negotiations following a surprise leftwing win that thwarted Marine Le Pen’s far-right ambitions. The success of strategic candidate withdrawals by centre and left parties is evident as the Nouveau Front Populaire bloc secured the most seats, preventing Le Pen’s Rassemblement National from gaining a majority. 

In her first major address since Labour’s win last week, Britain’s new chancellor Rachel Reeves will announce her commitment to making “tough decisions” to stimulate economic growth on Monday. This includes swift measures to clear infrastructure bottlenecks and attract private investment. 

Fewer British businesses plan price increases in the coming months, potentially impacting Bank of England interest rate decisions. According to the British Chambers of Commerce, 39 per cent anticipate price hikes in the next three months, down from 46 per cent in April. 

This week’s economic calendar is relatively quiet, with the main highlight being the monthly update on UK GDP.  

However, corporate news will be active as Wall Street gears up for the start of earnings season, beginning with reports from Citigroup, JP Morgan, and Wells Fargo later in the week. 

Federal Reserve Chair Jerome Powell is set to testify before Congress on Tuesday, a significant event for market watchers. On Thursday, attention will turn to the release of the monthly consumer price index, providing crucial insights into inflation trends.  

Additionally, the Reserve Bank of New Zealand is expected to keep its policy rate steady at 5.50 per cent during its meeting on Wednesday, July 10th.