FTSE 100 preview: Footsie set to open higher on US stimulus optimism

Written by: Siana Mishkova
April 14, 2020

iNVEZZ.com, Friday, November 15: Britain’s benchmark equity index is expected to open higher today, tracking a rally on US and Asian markets as traders gain confidence that the US Federal Reserve’s easy monetary policy will be maintained for the time being. At her confirmation hearing before a Senate panel yesterday, Fed Vice Chair Janet Yellen defended the central bank’s extraordinary easing programmes and expressed concern about the fragile economic recovery, sluggish job growth and low inflation rate. The FTSE 100 is expected to open some 17 points, or 0.3 percent, higher today, according to CNBC.

Yesterday, the Footsie gained 0.54 percent to close at 6,666.13, posting its highest one-day rise in three weeks, as traders cheered Yellen’s dovish comments. Among gainers, Britain’s biggest insurer by market value Prudential (LON:PRU) and luxury fashion house Burberry Group (LON:BRBY) were boosted by upbeat earnings reports (Prudential’s share price driven higher by new business profit – https://invezz.com/news/equities/6811-prudentials-share-price-driven-higher-by-new-business-profit), (Burberry share price climbs as H1 results meet guidance – https://invezz.com/news/equities/6802-burberry-share-price-climbs-as-h1-results-meet-guidance). On the opposite side, profit warnings by British Gas owner Centrica (LON:CNA) and outsourcer Serco (LON:SRP) pushed their stocks lower (Centrica share price drops on flat full-year earnings forecast), (Serco share price plunges on profit warning).

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**Global markets rally**
Yellen’s comments spurred upbeat sentiment worldwide. In the US, the Dow and the S&P 500 hit new records, while Japan’s NIKKEI 225 reached a near six-month high. The benchmark Standard & Poor’s 500 Index added 0.48 percent to close at 1,790.62 and the Dow Jones Industrial Average gained 0.35 percent to finish at 15,876.22, although a 13 percent drop in Cisco Systems (NASDAQ:CSCO) weighed on the index (Cisco share price dips 10% on Q1 results). Japan’s benchmark index rose 1.95 percent to close at 15,165.92. Asian stocks were also buoyed by Morgan Stanley comments that the Chinese government will release details about its economic reform agenda over the next seven to 10 days.

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**Earnings reports**
Companies due to report earnings and trading updates today include miners Vedanta Resources (LON:VED) and Gem Diamonds (LON:GEMD), The Restaurant Group (LON:RTN), property investment companies Capital & Counties Properties (LON:CAPC) and Alpha Pyrenees Trust (LON:ALPH), industrial manufacturing company Rotork (LON:ROR), floor coverings distributor Headlam Group (LON:HEAD), industrial maintenance and repair products supplier Brammer (LON:BRAM), engineering company IMI (LON:IMI), castings producer Castings PLC (LON:CGS), specialist currency manager Record PLC (LON:REC) and UTV Media (LOMN:UTV).

On the macroeconomic front, revised eurozone inflation figures for October are due be released today, with the CPI index expected at 0.7 percent. US industrial and manufacturing production reports for October are also due later today, with forecasts pointing at a 0.1 percent growth in industrial output, down from 0.6 percent a month earlier, and a 0.1 percent increase in manufacturing production, the same as in September.
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