The UK benchmark index looks set to open higher this morning, recovering some of the previous session’s losses, despite a renewed tech selloff on the other side of the Atlantic in the wake of the Federal Reserve’s decision to hike rates. On the corporate front, Tesco (LON:TSCO) is scheduled to update investors on its first-quarter performance this morning.
IG's opening calls suggest that the Footsie will start the day 0.19 percent higher at 7,433 points. US stocks closed lower last night, amid a renewed selloff in tech shares, while Asia has been mixed this morning, following the downbeat US lead and after the Bank of Japan left its monetary policy unchanged.
“It was a brutal day for the tech sector once again as investors are increasingly more worried about the (Federal Reserve) tightening cycle and how that would put a number of firms in trouble,” Naeem Aslam, chief market analyst at ThinkMarkets in London, wrote in a note, as quoted by Reuters. “The tech boom has been on the back of easy money and lower interest rates. Both of them are leaving town.”
The Footsie tumbled yesterday, shedding 55.04 points to end the session 0.74 percent lower at 7,419.36 points, following the Bank of England’s five to three vote to keep rates unchanged, which was interpreted as hawkish by investors.
Today’s macroeconomic calendar includes final eurozone inflation data for May, due out at 10:00 BST. On the other side of the Atlantic, US housing starts and building permits for May are scheduled to be released at 13:30 BST. In corporate updates, Tesco will post its first-quarter results and analysts expect recovery at Britain’s biggest grocer to have continued during the first three months of the year.