FTSE 100 watch: Risk-off sentiment to weigh on Footsie

on Feb 27, 2014
Updated: Apr 9, 2020

iNVEZZ.com, Thursday, February 27: Britain’s blue-chip index is poised to open lower today with investors staying on the sidelines amid political turmoil in Ukraine and ahead of a testimony by US Federal Reserve Chair Janet Yellen later today.

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On the earnings front, Royal Bank of Scotland Group Plc (LON:RBS) and RSA Insurance Group Plc (LON:RSA) are just two of the companies posting their latest trading figures today.
**Footsie expected to open lower**
CNBC has quoted IG analysts as forecasting that the Footsie will open four points lower at 6,795. Yesterday, the index closed in the red for a second day, dropping 0.46 percent to 6,799.15 points after analyst downgrades prompted a sell-off in Tesco (LON:TSCO). Tesco’s share price closed 2.74 percent lower at 326.00p yesterday.

Despite yesterday’s decline, the UK benchmark index has still gained 4.4 percent this month, staying on track for its best month since July. Yesterday, the Office for National Statistics confirmed that the UK’s gross domestic product had expanded 0.7 percent in the last quarter of 2013, matching its earlier estimate.
Today, investors remain cautious ahead of Fed Chair Yellen’s second testimony before the US congress this month. During her testimony before the House Financial Committee, she noted that the US central bank would continue to scale back its now $65 billion-a-month bond-buying programme unless there was a notable change in the economy. CNBC has reported that traders expect another $10 billion cut when central bankers meet next month.

**Earnings season in full swing**

The earnings session will be jam-packed today with scheduled releases from RBS, RSA, Standard Life (LON:SL), WPP (LON:WPP), Capita Plc (LON:CPI), British American Tobacco (LON:BATS), Reed Elsevier (LON:REL) and Whitbread Plc (LON:WTB).

RBS’ results will be the most closely watched with the 81 percent taxpayer-owned bank largely expected to reveal losses of about £8 billion and announce plans to exit up to 20 countries. (RBS share price: Bank to announce full-year loss of ₤8 billion)

RSA’s share price will also be in focus with markets expecting the group to slash its dividend for 2013 due to the impact of fraud at its Irish business and the severe floods this winter. (RSA share price: ‘No final decision’ on rights issue) Media reports have suggested that the insurer is planning to shore up its balance sheet via an £800 million rights offering.
In addition to posting its annual results, Standard Life is expected to flag its concerns about Scottish independence. (Standard Life share price: Company expected to warn of Scottish independence risks) Analysts have warned that the group’s pension business, which has £97 billion in assets, could be destroyed without the benefit of UK tax relief if Scotland votes for independence in September.

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