FTSE 100 watch: Index to pause after record highs

Sainsbury’s to follow Morrisons with trading update

FTSE 100 watch: Index to pause after record highs

The UK benchmark index looks set to open lower this morning, taking a breather following yesterday’s record highs, and following mixed leads from the US and Asia. On the corporate front, J Sainsbury (LON:SBRY) will follow peer Wm Morrison Supermarkets (LON:MRW) with a trading update.

Index seen subdued

IG’s opening calls suggest that the FTSE 100 will start the session 0.09 percent lower at 7,724 points. US shares finished at record highs last night, with sentiment remaining upbeat as investors looked to the upcoming earnings season.

“It’s been a great start to the year. The momentum we saw in 2017 carried over into this year,” said Jim Davis, regional investment manager at US Bank Wealth Management, as quoted by CNBC. Asian shares meanwhile have been subdued this morning, while oil has remained at a three-year high.

“The rally has been a bit too fast. Investors are taking profits in high-flying hi-tech shares. But the earnings and economic outlook in Asia remains solid,” Yukino Yamada, senior strategist at Daiwa Securities, told Reuters.

The FTSE 100 also rose to a record high yesterday, finding support in retailers, whose shares were in demand on the back of Morrisons’ update. The index added 34.51 points to end the session 0.45 percent higher at 7,731.02.

Wednesday’s calendar

On the macroeconomic front, the UK trade balance for November is scheduled to be released at 09:30 GMT. IG reports that the nation’s deficit is expected to have widened to £3.3 billion from £1.4 billion.

In company releases, Sainsbury’s is expected to unveil a rise in sales when it updates investors on its third-quarter performance this morning. Blue-chip housebuilder Taylor Wimpey (LON:TW) is also reporting today.

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