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FTSE 100 Live: Evergrande debt hopes rise, UK retail sales disappoint

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xpectations that debt-laden property firm Evergrande will make a key interest payment at the weekend should boost confidence after London-listed miners fell sharply yesterday.

The FTSE 100 index is poised to open higher, although the underlying picture for the UK economy continues to cause concern after this morning’s disappointing retail sales figures and the Gfk’s consumer confidence index that shows “all vital signs weakening”.

The uncertain picture adds to the pressure on Bank of England policymakers as they consider whether to hike interest rates next month amid a warning from its chief economist last night that inflation could get close to 5% early next year.

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Markets boosted by Evergrande debt hopes

European markets should open higher amid reports in China that indebted property firm Evergrande will pay the $83 million interest due on its US dollar bond tomorrow.

It comes a day after Evergrande’s shares fell 13% on their resumption of trading in Hong Kong, having failed to complete deal that would have raised $2.6 billion from the sale of a controlling stake in a property services business.

Oanda senior market analyst Jeffrey Halley thinks the payment should give a temporary reprieve to the China financial system contagion fears, although he adds that another grace period payment worth $45.2 million is due next Friday.

“Still, if they’ve managed to scrape together the funds for this one, it is reasonable to surmise that next weeks will also be met,” he said.

US equities continue to show strength on the back of the strong earnings season, leading to the S&P 500 posting a seventh consecutive advance and another all-time high. Consumer and retail stocks drove the performance.

The tech-laden Nasdaq also moved towards a record high, but that was before Snap shares sank 24% in aftermarket trading following the release of disappointing earnings figures.

The Snapchat owner blamed Apple’s new privacy rules for impacting the ability of advertisers to reach iPhone users with targeted adverts.

CMC Markets predicts that the FTSE 100 index will open 23 points higher at 7213, continuing an up and down period of trading for London’s top flight.

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