The UK benchmark index looks set to extend the previous session’s hefty losses, pressured by rising geopolitical tensions.
IG’s opening calls suggest that the Footsie will start the day 0.57 percent lower at 7,348 points. Sentiment is expected to remain downbeat in today’s trading, amid the ongoing summer lull and after the Dow posted its worst drop since May after President Donald Trump doubled down on his remarks from earlier this week that North Korea would face ‘fire and fury’. Pyongyang meanwhile has threatened to strike Guam.
“We’re through most of the earnings season and the valuations [in the stock market] become a bit problematic when you have something like North Korea come up,” said Maris Ogg, president at Tower Bridge Advisors, as quoted by CNBC. The newswire also quoted Michael Shaoul, chairman and CEO of Marketfield Asset Management, as commenting in a note that the assumption was “that the ‘battle of the bombasts’ will remain verbal for the foreseeable future and that Guam will drop out of the headlines as quickly as it has been inserted into them”. Asian shares meanwhile have tracked the US lower this morning.
The FTSE 100 index tumbled yesterday, shedding 108.12 points to end the session 1.44 percent lower at 7,389.94, pressured by a selloff in homebuilders, which reacted to the latest house data, as well as by the ongoing geopolitical worries.
Today’s macroeconomic agenda includes the eurozone’s industrial production for June, due out at 10:00 BST. With the earnings season winding down, Old Mutual (LON:OML) is the only FTSE 100 company scheduled to update the market on its performance this morning. Royal Mail Group (LON:RMG) will also be in focus as City A.M. reported that the postal operator’s pension liabilities to be shouldered by the taxpayer had soared by £8.5 billion over the last year.