The UK benchmark index looks set to open higher this morning, tracking the US higher, following comments from the Federal Reserve Chair. Investors will also digest the results from the Bank of England’s stress test.
Upbeat start ahead
IG’s opening calls suggest that the Footsie will start trading 0.50 percent higher at 7,040 points. The index is likely to take cues from the US where shares rose last night after Federal Reserve Chairman Jerome Powell said that interest rates were close to neutral.
Robert Pavlik, chief investment strategist at SlateStone Wealth, told CNBC that Powell’s comments were “exactly what the market was expecting to hear”. The newswire notes that the ‘just below’ remark differs from the ‘long way from neutral’ comment he gave at the beginning of October. Asian shares have tracked the US higher.
In the UK the Footsie closed marginally lower yesterday, giving up 12.33 points to end trading 0.18 percent lower at 7,004.52, pressured by Brexit worries and caution ahead of the G-20 summit later in the week.
Investors have a lot to look out for on the macroeconomic front today, starting with German unemployment data for November 08:55 GMT, followed by eurozone business confidence data for the same month at 10:00 GMT. Germany’s preliminary inflation data for November will follow at 13:00 GMT. On the other side of the Atlantic, the day will continue with US personal income and spending numbers for October at 13:30 GMT, followed by the nation’s pending home sales for October at 15:00 GMT. The minutes from the Federal Reserve’s latest policy meeting will be announced at 19:00 GMT, after the London market closes.
Blue-chips, whose shares will be trading without the attraction of their latest dividend in today’s session, include International Consolidated Airlines (LON:IAG), Johnson Matthey (LON:JMAT), Land Securities (LON:LAND) and Severn Trent (LON:SVT). Reuters’ calculations suggest that ex-divs will knock 1.56 points off the Footsie.