FTSE 100 preview: Index seen steady despite downbeat US lead

Unilever to post results

FTSE 100 preview: Index seen steady despite downbeat US lead

The FTSE 100 looks set to open little changed this morning, despite a downbeat lead from the US where shares fell last night following the minutes from the Federal Reserve’s latest policy meeting. On the corporate front, investors will eye an update by Anglo-Dutch consumer goods giant Unilever (LON:ULVR).

Index seen steady

IG’s opening calls suggest that the FTSE 100 will start trading 0.02 percent higher at 7,056 points. Investors are likely to shrug off a downbeat lead from the US, where the Dow retreated as the Fed signalled that the US central bank was leaning toward more rate hikes going forward.

“The risk of inflation overheating currently is small, but the Fed is communicating that if inflation were to rise aggressively beyond their forecast, then they would hike rates above the neutral rate of 3.00 percent,” Jim Caron, managing director at Morgan Stanley, said in a note, as quoted by CNBC. Asian shares meanwhile have struggled to make headway this morning.

In the UK, the Footsie slipped marginally into the red, adding 4.80 points to close 0.07 percent higher at 7,054.60, finding support in a weaker pound.

“Hopes for Brexit deal has supported the pound for the past two months,” Tohru Sasaki, head of markets research at JPMorgan Chase Bank, told Reuters. “So if there’s no meaningful development, other than longer transition period, the pound could come under short-term selling pressure.”

Thursday’s agenda

Today’s macroeconomic statements include UK retail sales data for September, due out at 09:30 BST. IG reports that sales are expected to have fallen 0.3 percent month-on-month, but to have climbed 2.8 percent year-on-year.

In company releases, Unilever will update investors on its performance, after it recently scrapped its plan to abandon its dual-headed structure following significant opposition from investors.

FTSE 100 companies, whose, shares will be trading without the attraction of their latest dividend in today’s session, include BAE Systems (LON:BA) and Smiths Group (LON:SMIN). Reuters’ calculations suggest that ex-divs will knock about 1.58 points off the Footsie.

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