FTSE 100 preview: Index to open higher after Asia rally

on Oct 20, 2014
Updated: Oct 21, 2019

iNVEZZ.com, Monday, October 20: The FTSE 100 is expected to edge higher at the opening today, following a rally in Asian markets.

According to trading platform IG, the UK benchmark index will open today 26 points up at 6,336, with no scheduled corporate and economic releases from listed companies to provide direction.
The Footsie ended Friday’s session on a positive note after a week of volatile and largely negative trading. The gauge settled 1.85 percent, or 114.38 points, higher at 6,310.29, limiting the week’s losses to 32.63, or 0.51 percent.

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The FTSE 100 was buoyed by better-than-expected earnings and better economic data out of the US. On Friday, data showed that consumer sentiment in early October rose to a seven-year high. Comments from Federal Reserve officials were in focus with Chair Janet Yellen voicing concern about income inequality on Friday, while St. Louis Fed President James Bullard said on Thursday that the central bank should think about postponing the end of its bond purchases. Data also showed new housing starts rose more than expected last month, suggesting solid US economic growth.

**S&P 500 posts longest weekly loss streak since 2011**
US stocks rallied on Friday, softening a fourth week of losses. Scaling back after a 310-point jump, the Dow Jones Industrial Average rallied 1.6 percent, or 263.17 points, to 16,380.41. The index lost one percent for the week, halting a six-session decline.
The S&P 500 posted its longest weekly losing streak since August 2011, but added 1.3 percent, or 24 points, to 1,886.76 on Friday’s close. The Nasdaq climbed one percent, or 41.05 points, to 4,258.44, down 0.4 percent from the previous week.

**Asian stocks rally, China on focus**
Tracking the strong US lead, Asian equities enjoyed a broad-based rally today, with investor attention focused on developments in China where members of the Central Committee of the ruling Communist Party will gather for their fourth plenum today.

The rule of law will be a key focus at the meetings, with expectations that provincial courts will be given more independence to limit influence by local authorities. The meetings will also be watched for whether Hong Kong’s pro-democracy movement will be discussed. Police remained in a standoff with protesters on Monday following clashes and several arrests over the weekend.
As of 06:40 BST, MSCI’s broadest index of Asia-Pacific shares outside Japan was 1.33 percent, just 7.29 points, down at 556.51. At that time also, Japan’s Nikkei 225 was soaring 533.80 points to be 3.63 percent higher at 15,060.75, on track to post its biggest daily rise in more than a year and retaking some of the five percent it shed in the previous week.
Tokyo’s benchmark index in particular was underpinned by expectations that Japan’s $1.2 trillion Government Pension Investment Fund, the world’s largest public pension fund, will likely raise its allocation for domestic stocks to about 25 percent, Reuters has reported, citing people familiar with the process.


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