FTSE 100 preview: Upbeat China PMI to boost market sentiment

on Jun 23, 2014
Updated: Apr 9, 2020

iNVEZZ.com, Monday, June 23: The FTSE 100 Index is set to open slightly higher today, with market sentiment buoyed by upbeat Chinese data, released earlier today, and another record US close on Friday. Britain’s blue-chip index closed 0.25 percent, or 17.09 points, higher at 6,825.20 in Friday’s session, following a steep rise in the share price of Shire Plc (LON:SHP). The Dublin-based biopharmaceutical firm soared nearly 17 percent after news emerged that it had rejected a merger proposal from US drugmaker AbbVie Inc (Shire share price jumps 14% as US suitor confirms takeover approach).

According to data from IG, the Footsie will open 10 points higher today.
**China economy picking up**
The FTSE 100 is expected to be boosted by a positive economic data release in China which provided more evidence that the world’s second-largest economy is stabilising. A flash reading of HSBC’s China purchasing managers’ index revealed that the country’s manufacturing activity expanded in June for the first time in six months. The reading came in at 50.8, above the 50 mark that separates expansion from contraction and ahead of market expectations of 49.7.

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Qu Hongbin, chief economist for China at HSBC, said in today’s press release: “This month’s improvement is consistent with data suggesting that the authorities’ mini-stimulus are filtering through to the real economy.”
“We expect policymakers to continue their current path of accommodative policy stance until the recovery is sustained,” he added.

The impact of the upbeat data was immediately felt across Asian equity markets. Japan’s benchmark Nikkei 225 Index was up 0.1 percent at 15,364.50 as of 06:34 BST. The Shanghai Composite Index was 0.11 percent higher at 2,029.00 as of 06:21 BST.

The Footsie is also likely to find additional support from a strong US trading session on Friday, when both the Dow Jones and the S&P 500 extended gains to close at record levels. The Dow notched up 0.15 percent to finish at 16947.08 and the S&P 500 gained 0.17 percent to end the week at 1962.87. The technology-heavy Nasdaq Composite Index rose 0.2 percent to 4368.04.
Highlights from the economic calendar today include PMI figures for Germany and the eurozone as a whole, due out at 09:30 BST and 10:00 BST, respectively. There are no FTSE 100 corporate releases scheduled for today.


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