Proactive Investors - The FTSE 100 is expected to rally at the open after US stocks closed off earlier lows while China slipped into deflation in July.
Spread betting companies are calling London’s premier index up by around 34 points after closing down 27.07 points at 7,527.42 on Tuesday.
In Asia, China slipped into deflation as consumer prices contracted last month for the first time in more than two years.
The consumer price index fell 0.3% in July, the National Bureau of Statistics said, having flatlined in June.
Michael Hewson at CMC said: “Chinese deflation has been the proverbial elephant in the room when it comes to recent tightening measures from the Federal Reserve, the ECB, and Bank of England.”
“How many more rate hikes can we expect in the coming months when there is a clear deflationary impulse coming from Asia, and where is the tipping point when it comes to the risk of overtightening.”
The Nikkei 225 index in Tokyo was down 0.4%. In China, the Shanghai Composite eased 0.6%, while the Hang Seng index in Hong Kong fell 0.4%.
It’s a busier day in the corporate calendar with Bellway (LON:BWY), Coca-Cola (NYSE:KO) HBC, Flutter, TUI (LON:TUIT) and 4imprint all reporting numbers.
In the US on Tuesday, the Dow Jones Industrial Average closed down 0.5%, the S&P 500 down 0.4% and the Nasdaq Composite down 0.8%. All three ended well above the lows seen at London’s close.