The UK benchmark index looks set to jump at the open this morning, regaining some of the ground lost in the previous sessions, following a volatile session on the other side of the Atlantic. In company releases GlaxoSmithKline (LON:GSK) will post its first full-year results under new chief executive Emma Walmsley.
Recovery on the cards
According to IG’s opening calls, the FTSE 100 will start the session 0.57 percent higher at 7,182 points. The higher open is expected following a volatile session in the US where the Dow Jones closed 567.02 points higher, having lost 567 points in earlier trading.
“Widespread and excessive optimism left stocks vulnerable to increased volatility as bond yields have moved off their lows,” said Bruce Bittles, chief investment strategist at Baird, as quoted by CNBC. “While there is some early evidence that selling pressures are becoming exhausted, and stocks could soon see relief, the broad market is seeing meaningful deterioration.” Asian shares meanwhile have also recovered some ground this morning.
“If we look at some of the drivers of the recent volatility – the natural correction and the bond sell-off – we don’t foresee any of these factors contributing to a lengthy period of extreme volatility,” Tom Kenny, senior economist at ANZ, told Reuters. “The correction is probably a healthy development and is not reflective of a souring of the macroeconomic outlook.”
In the UK, the Footsie shed 193.58 points to end the session 2.64 percent in the red at 7,141.40, as the equities selloff intensified around the world.
There are no major macroeconomic releases out of Europe this morning. On the corporate front, GSK is expected to reveal a rise in sales when it updates investors on its performance at noon. Other blue-chips reporting today include Rio Tinto (LON:RIO) and Severn Trent (LON:SVT).