The UK benchmark index looks set to start the last trading day of a turbulent week in negative territory after another hefty selloff on the other side of the Atlantic. Tesco (LON:TSCO) will be in focus on the corporate front today amid reports that a US hedge fund is planning to oppose the blue-chip supermarket’s tie-up with Booker Group (LON:BOK).
Downbeat start ahead
IG’s opening calls suggest that the FTSE 100 will start the session 0.62 percent in the red at 7,126 points. The blue-chip index is likely to take cues from the US where shares fell sharply last night, amid ongoing worries over higher interest rates.
“This whole correction is really about rates. It’s really about inflation creeping up. It’s really about people thinking the Fed is either behind the curve or actually has to be more aggressive,” Stephanie Link, global asset management managing director at TIAA, told CNBC’s ‘Closing Bell’. Stocks in Asia have tracked the US lower this morning.
In the UK, the FTSE 100 shed 108.73 points to end the session 1.49 percent lower at 7,170.69, following the Bank of England policy statement, which sent the pound higher.
“We are growing cautious on those companies which rely heavily on overseas earnings, as rising interest rates could cause the pound to strengthen further from here,” Andrew Morgan, portfolio manager of Alpha:r² at Walker Crips,” told Reuters.
Today’s macroeconomic calendar includes the UK trade balance for December, scheduled to be released at 09:30 GMT. IG reports that the nation’s deficit is expected to have narrowed to £2.5 billion from £2.8 billion. There are no blue-chip companies scheduled to update investors on their performance this morning. In other news, Reuters reports that a US hedge fund which owns a stake in Booker is planning to oppose Tesco’s £3.7-billion takeover bid unless the wholesaler secures a better deal.