FTSE 100 preview: Index poised for hefty selloff as risk-off mood returns

Earnings season continues with RBS and IAG

FTSE 100 preview: Index poised for hefty selloff as risk-off mood returns

The UK benchmark index looks set to start the last trading session of the week deep in the red, with risk-off sentiment gripping markets around the world. With the earnings season in full swing, investors will eye updates from Royal Bank of Scotland Group (LON:RBS) and British Airways and Iberia parent International Consolidated Airlines Group (LON:IAG).

FTSE 100 to post fall

IG’s opening calls suggest that the Footsie will open 0.99 percent lower at 6,935 points. The blue-chip index is likely to take cues from Asia where shares have fallen to 20-month lows this morning, amid geopolitical and trade worries.

“There’s no question that the weight of sentiment has been building,” James McGlew, executive director of corporate stockbroking at Argonaut in Brisbane, told Reuters, highlighting in particular rising geopolitical tensions including Brexit, and “internal financial tension” in China. “All of these things added up to the volatility hitting a boiling point [...] and I don’t think at the moment people should be trying to catch the falling knife.” While US shares rose last night, futures are pointing to a lower open later this Friday.

In the UK, the Footsie rose in the previous session, gaining 41.12 points to close 0.59 percent higher at 7,004.10, as investors digested earnings releases, and after the European Central Bank left rates unchanged.

Friday’s agenda

Today’s macroeconomic statements include Germany’s GfK consumer confidence index for November, due out at 07:00 BST. In the US, the nation’s preliminary third-quarterly gross domestic product will be announced at 13:30 BST. IG reports that growth is forecast at 2.6 percent quarter-on-quarter, from 4.2 percent.

In corporate releases, RBS and IAG will post their third-quarter results. Investors will also eye a production report from commodities giant Glencore (LON:GLEN).

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