European stocks will open with a defensive tenor Thursday as global market momentum slows amid concerns over slumping oil prices and divergent central bank signals from the world's biggest economies.
Switzerland's SMI index is the only benchmark expected to open in positive territory at the start of trading, according to financial bookmakers IG, suggesting investors will favor defensive stocks into the end of the trading week.
Britain's FTSE 100 is expected to open modestly lower, with gains likely limited by stagnant oil majors and a stronger pound, which gained against the U.S. dollar yesterday and remains at 1.2673 in early European trading after the Bank of England's chief economist, Andy Haldane, appeared to split with Governor Mark Carney in arguing for rate increases to combat surging inflation.
In Europe, the single currency remained range-bound at 1.1170 amid a dearth of headline drivers and the backdrop of easy monetary policy from the European Central Bank.
Overnight in Asia, the region-wide Asia ex-Japan index rose 0.6% by 07:00 London time, boosted by the index provider's decision earlier this week to add 222 mainland-China shares to its emerging markets benchmark. A modestly stronger yen, however, held down gains for the Nikkei 225 in Japan, which fell 0.14% at the close, but still ended the session over the 20,000 point barrier.
Global oil prices edged higher in overnight trading, but remain within touching distance of 10-month lows after a 2.3% slide yesterday that came despite a 2.7 million barrel drop in crude stocks in the week ending June 16 reported yesterday by the Energy Information Administration.
However, the EIA also noted that U.S. production rose to 9.35 million barrels per day, which challenges the levels of the world's biggest producers in Russia and Saudi Arabia, and that kept further downward pressure on prices, which have suffered their longest six-month decline in 20 years.
West Texas Intermediate crude futures for August delivery traded little-changed from their Wednesday close at $42.52 in early London dealing while Brent contracts for the same month, the global benchmark, were marked 7 cents lower at $44.75.
Tech stocks could be set to drive gains once again on Wall Street, according to U.S. equity futures, with the Nasdaq set to rise around 15 points at the opening bell. The broader S&P 500, however, will likely start the session little-changed from its 2,453.61 point close on Wednesday.