FTSE 100 preview: Footsie seen opening lower, BoE inflation report in focus

on Nov 13, 2013
Updated: Oct 21, 2019

iNVEZZ.com, Wednesday, November 13: Britain’s benchmark equity index is expected to open lower today, tracking US and Asian markets after mixed signals from Federal Reserve officials and renewed market jitters about the start of the QE tapering. A number of earnings reports are due today, but the main focus will be on the Bank of England’s quarterly inflation report, which some analysts expect to include an upward revision of the bank’s economic forecasts. Yesterday, data from the Office for National Statistics showed that UK consumer price inflation fell to 2.2 percent in October from 2.7 percent in the prior month, moving closer to the central bank’s inflation target of 2.0 percent. The decline in inflation and signs of an improving economy support expectations that the bank may soon lift its benchmark interest rate from the current record low of 0.5 percent. UK monthly employment figures will also be in focus today, as the central bank has said that it will keep interest rates unchanged until unemployment falls below 7.0 percent.

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Today also marks the start of unconditional trading in Merlin Entertainments (LON:MERL) (Merlin share price pauses ahead of unconditional trading)
The FTSE 100 is expected to open some 31 to 50 points, or 0.7 percent, lower today, according to data by financial bookmakers. Yesterday, the Footsie edged 0.02 percent lower to close at 6,726.79 points, pushed down by losses in financials and miners. The Royal Bank of Scotand (LON:RBS) led financial stocks down after Goldman Sachs removed the stock from its conviction ‘buy’ list and cut its rating to ‘neutral’. Mining stocks fell on concerns that potential economic reforms in China, the world’s biggest metals’ consumer, could hit demand for basic resources. GlaxoSmithKline (LON:GSK) also weighed on the index, falling 0.8 percent after reporting that one of its experimental heart drugs had failed to meet targets in a study (GSK share price drops as heart drug disappoints in test).

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US stocks fell yesterday amid continued speculation about when the Fed will start winding down its bond-buying programme. An increasing number of analysts now believe that tapering may start as early as next month, taking into account the recent better-than-expected GDP and jobs data, corporate earnings, and comments by Fed officials. The benchmark Standard & Poor’s 500 Index lost 0.24 percent to close at 1,767.69 and the Dow Jones Industrial Average retreated from Monday’s all-time closing high, closing 0.21 percent down at 15,750.67.

Equity markets in Asia were depressed after the results of a key policy meeting of the Chinese Communist Party fell well short of investor expectations and failed to provide concrete details about the country’s reform agenda for the next 10 years. Japan’s benchmark index the NIKKEI 225 lost 0.15 percent to close at 14,567.16.
**Earnings reports**

Today’s earnings releases include reports from the UK’s second largest supermarket chain J Sainsbury (LON:SBRY), the country’s second largest REIT British Land (LON:BLND), property developers Barratt Developments (LON:BDEV) and Derwent London (LON:DLN), football club Manchester United (NYSE:MANU), Africa-focused oil and gas companies Tullow Oil (LON:TLW) and BowLeven (LON:BLVN), media companies Centaur Media (LON:CAU) and Johnston Press (LON:JPR), electricity producers Drax Group (LON:DRX) and SSE (LON:SSE), polymer products manufacturer Fenner (LON:FENR), brokerage ICAP (LON:IAP), Liontrust Asset Management (LSE:LIO), London Stock Exchange (LON:LSE), Partnership Assurance Group (LON:PA) construction companies Interserve (LON:IRV) and Kier Group (LON:KIE), online gambling company Bwin.Party Digital Entertainment (LON:BPTY) and business processing, technology and procurement services provider Xchanging (LON:XCH).

Major European companies reporting quarterly results today include Moller-Maersk, Carlsberg, GDF Suez, E.on, and Intesa Sanpaolo.
BSkyB (LON:BSY), GlaxoSmithKline, Marks & Spencer (LON:MKS), and Royal Dutch Shell (LON:RDSA, LON:RDSB) will go ex-dividend today, taking some 11.62 points off the FTSE 100, according to Reuters calculations.
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Prices can go up and down meaning you can get back less than you invest. This is not advice. Dealing services provided by Hargreaves Lansdown.
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