iNVEZZ.com, Monday, October 27: Britain’s blue-chip index is expected to open in positive territory this morning after the European Central Bank (ECB) stress test results painted a brighter picture of the eurozone than expected.
The FTSE 100 fell on Friday but finished more than one percent higher for the week, marking the index’s best intraweek performance since August.
**FTSE 100 called higher**
According to IG, the UK benchmark index will open 21 points higher at 6410. The Footsie is expected to kick off the week on an upbeat note alongside other European indices after the ECB said yesterday that while 25 out of 130 lenders had failed the bank’s health checks at the end of last year, most had since recovered.
“Overall, the market seems to have found this report quite credible,” Stan Shamu, market strategist at IG, said in a note. “Given the ECB is already engaging in recapitalisation activities and other measures, then perhaps investors will remain at ease.”
Stocks in Asia have been mixed this morning, while US equities climbed on Friday, halting a four-week slide, amid upbeat quarterly updates from Microsoft (NASDAQ:MSFT) and Procter & Gamble (NYSE:PG).
“It’s largely about the better-than-expected earnings today; P&G and Microsoft were both reassuring to investors. And falling gasoline prices mean the consumer has more spending money, so domestically, consumer spending is likely to pick up,” Kate Warne, investment strategist at Edward Jones, told CNBC.
Today’s economic releases include the German IFO index for October, expected at 10:00 GMT. IG reports that the business climate reading is forecast to have climbed fractionally, to 104.8 from 104.7 last month. In the US, the preliminary October services Purchasing Managers’ Index is due out at 14:45 GMT, followed by pending home sales at 15:00 GMT. No FTSE 100 companies are scheduled to release reports today.
**Strongest week since August**
The FTSE 100 lost 0.47 percent to close at 6,388.73 points on Friday. Despite the decline, the index posted a 1.2 percent gain for the week, the most since August.
Fawad Razaqzada, technical analyst at Gain Capital, however, told Reuters that the close below 6,400 indicated that further falls were likely.
“We broke above 6,400 yesterday but we’re struggling to climb further above that level… we could see another leg lower, towards 6,300, near the low in October 2013, and this month’s low of 6,070.”