FTSE 100 preview: Footsie seen as opening higher

on Nov 11, 2013
Updated: Oct 21, 2019

iNVEZZ.com, Monday, November 11: Britain’s benchmark equity index is expected to open higher today, as investors’ focus switches towards hopes that the US economy has entered a strong recovery path following better-than-expected GDP and jobs data last week. However, inflation data from China might weigh on market sentiment, as a rise in annual inflation to an eight-month high of 3.2 percent in October raised concerns about monetary policy tightening. The FTSE 100 is expected to open some 13 to 15 points, or 0.2 percent, higher today, according to data by financial bookmakers, quoted by Reuters.

On Friday, the Footsie gained 0.17 percent to close at 6,708.42 points, after initially falling following the better-than-expected US jobs data. However, the underlying news behind the non-farm payrolls report that the US economy is on a sustainable recovery path, coupled with stronger-than-expected US GDP data that came out on Thursday, outweighed the primary fear that tapering of the Fed’s equity-friendly bond-buying programme may start as early as next month. The benchmark index was also boosted by upbeat updates by airline IAG (LON:IAG) (IAG share price rises as Q3 profit beats estimates) and Rolls Royce (LON:RR) (Rolls-Royce share price up on higher defence aerospace forecast). It is widely expected that the UK stock market might stall this month after a strong run-up in October, before returning to growth at the end of the year.

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The jobs data, which showed that the US economy added 204,000 workers in October, compared with an expected gain of 120,000 in a Bloomberg poll and an increase of 125,000 in a Reuters’ survey, helped boost US stocks. The readings for August and September were revised up by a total of 60,000, helping investors see the positive effect from stronger economic growth. The benchmark Standard & Poor’s 500 Index closed at 1,770.61, up 1.34 percent on the day, while the Dow Jones Industrial Average gained 1.08 percent to close at 15,761.78. A Bloomberg poll among 32 economists showed on Saturday that expectations remain for the Fed to scale back the monthly pace of bond buying by $15 million to $70 billion at their March 18-19 meeting.

Japanese stocks were also buoyed by the robust economic data from the US, which led to a weakening of the yen that backed exporters’ stocks. Japan’s benchmark index the NIKKEI 225 rose 1.3 percent to close at 14,269.84. Markets in Hong Kong and Shanghai were cautious, as investors await the end of a key policy meeting of the Chinese Communist Party on Tuesday, for details on reform plans and new projects.

**Earnings reports**
Today’s earnings releases include reports by low cost air carrier Flybe (LON:FLYB), platinum miner Lonmin (LON:LMI), internet retailer and digital marketing agency Tangent Communications (LON:TNG), motor insurer Admiral Group (LON:ADM), manufacturing company Cobham (LON:COB), the UK’s largest provider of funeral services Dignity plc (LON:DTY), property development and investment company Hammerson (LON:HMSO), Ireland-based building materials company Kingspan Group (LON:KGP), Morgan Advanced Materials (LON:MGAM), and Carrs Milling Industries (LON:CRM).

Major European companies reporting quarterly results today include Italy’s banking group UniCredit (BIT:UCG) and Kabel Deutschland (ETR:KD8), the German cable provider that is being taken over by Vodafone.
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