FTSE 100 preview: Index looking up after US rally

Sainsbury’s-Asda might have to sell at least 73 shops

FTSE 100 preview: Index looking up after US rally

The UK benchmark index looks set to continue its ongoing uptrend following a positive lead from the US. J Sainsbury (LON:SBRY) will be in focus as the BBC reported that new research has suggested that at least 73 supermarkets will have to be sold for the supermarket’s proposed merger with Asda to be given the go-ahead.

FTSE 100 to open higher

IG’s opening calls suggest that the Footsie will start the session 0.14 percent higher at 7,712 points. The blue-chip index is likely to take cues from the US where shares rose last night on the back of weaker-than-expected inflation data.

“Inflation is gradually rising, but it’s less likely to feed into the volatility we’ve seen recently,” said Mike Bailey, director of research at FBB Capital Partners, as quoted by CNBC. “I also think investors are looking at valuations and realize they are pretty reasonable.” Asian shares meanwhile have tracked the US higher this morning.

At home, the Footsie rose in the previous session, adding 38.45 points to close 0.50 percent higher at 7,700.97, with investors digesting corporate earnings and the Bank of England’s move to keep rates unchanged which pressured sterling.

“In light of the current uncertainty, the Bank is, understandably, inclined towards a more hesitant rather than pre-emptive approach to normalising policy,” Karen Ward, chief market strategist for the UK and Europe at JЗ Morgan Asset Management, told Reuters, referring to uncertainty around Brexit.

Friday’s releases

There are no major macroeconomic releases out of Europe to guide the markets further this morning. In the US, the Michigan consumer confidence index for May is due to be announced at 15:00 BST. With the earnings season winding down, no blue-chips are scheduled to update investors on their performance this morning.

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