FTSE 100 preview: Hefty fall ahead after US selloff

Lloyds to update on first-quarter performance

FTSE 100 preview: Hefty fall ahead after US selloff

The UK benchmark index looks set to open sharply lower this morning following a hefty selloff in the US. With the earnings season in full swing, investors have a lot to look forward to on the corporate front, including Lloyds Banking Group’s (LON:LLOY) first-quarter results.

Hefty fall ahead

IG’s opening calls suggest that the FTSE 100 will start the session 0.76 percent lower at 7,369 points. The blue-chip index is set to take cues from the US where the main indices closed deep in the red last night, with investors digesting corporate releases.

“Investors have high expectations for earnings,” said Kate Warne, investment strategist at Edward Jones, as quoted by CNBC. “At the same time, a lot of people are asking: Does it get better from here?” Asian shares have tracked the US lower this morning.

“We’ve seen quite a lot of companies announcing above-estimate earnings and their shares falling sharply,” Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities, told Reuters.

In the UK, the Footsie rose yesterday, adding 26.53 points to end the session 0.36 percent higher at 7,425.40, benefitting from a rise in oil stocks.

Wednesday’s agenda

There are no major macroeconomic releases out of Europe to guide the markets further this morning. On the corporate front, Lloyds is due to post results and MarketWatch reports that UBS forecasts underlying profit of £2.27 billion, up from the prior-year period’s £2.08 billion, while total income is expected to come in at £4.51 billion, from £4.41 billion in the first three months of 2017.

Other blue-chips reporting today include Whitbread, GlaxoSmithKline, Antofagasta, Fresnillo and Persimmon. Shire (LON:SHP) will stay in focus as its board has signalled that it would recommend a tie-up with Japan’s Takeda.

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