FTSE 100 preview: UK stocks set to open lower ahead of data

Britain’s benchmark equity index, the FTSE 100, is set to open lower today ahead of major US economic data this week that may provide new clues as to when the Federal Reserve will start scaling back its stimulus programme.

The FTSE 100 index is expected to open 15 points or 0.2 percent lower, according to CNBC. On Friday, the Footsie edged down 0.06 percent to close at 6,650.57, posting its first monthly loss since August. The blue chip index was driven down by credit data company Experian (LON:EXPN), which lost 2.8 percent making it the worst performer on the index after Goldman Sachs downgraded the stock to ‘sell’ from ‘neutral’.

Banks were amongst the gainers, boosted by the regulator’s decision to relax a new rule determining the quality of assets banks must hold to cover risks from pension liabilities. Barclays (LON:BARC) was the biggest gainer on the Footsie with a 2.3 percent rise.

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US stocks edged lower on light trading in a half-day session on Friday. The benchmark Standard & Poor’s 500 Index eased 0.08 percent to close at 1,805.81, and the Dow Jones Industrial Average fell 0.07 percent to close at 16,086.41. Technology stocks outperformed with the NASDAQ Composite Index hitting a 13-year high.

Asian shares were mostly lower overnight amid caution ahead of the key US data. The Shanghai CSI 300 Index closed 0.8 percent lower despite improved data on China’s manufacturing PMI (purchasing managers’ index). The final PMI reading eased to 50.8 from 50.9 in October, but was better than a preliminary reading of 50.4.

Hong Kong’s Hang Seng Index was up by 0.4 percent about an hour before the market close. Japan’s benchmark index, the NIKKEI 225, which reached a near six-year closing high last week, inched 0.04 percent lower to finish at 15,655.07.

Earnings reports

It will be a quiet day for earnings reports. Scientific digital camera maker Andor Technology (LON:AND) and business process services and software solutions provider Innovation Group (LON:TIG) are due to report full-year results, while stem cell therapy company ReNeuron Group (LON:RENE) and consultancy WYG (LON:WYG) will provide half-year updates.

Belfast-based Andor Technology is also due to issue a formal statement regarding an improved £5 per share takeover offer by tools maker Oxford Instruments (LON:OXIG), after initially calling the bidder’s approach uncertain and disappointing.

On the macroeconomic front, Markit will release its UK manufacturing PMI (purchasing managers’ index) for November. Britain’s manufacturing sector has grown strongly in recent months, reaching a two-year peak in August but it remains around nine percent lower than before the financial crisis. Eurozone and US manufacturing surveys data are also due today.

In other data, the Bank of England will release the aggregate funds outstanding under its Funding for Lending Scheme (FLS) after deciding last week to refocus the FLS, to this point aimed at mortgage borrowers, on loans to small firms in order to avoid fuelling house price inflation.

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