FTSE 100 preview: Index looking up on positive US lead

on Oct 31, 2014
Updated: Apr 9, 2020
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iNVEZZ.com, Friday, October 31: Britain’s blue-chip index is expected to kick off the last day of October on an upbeat note, after better-than-expected GDP numbers out of the US propped up Wall Street.

Royal Bank of Scotland Group Plc (LON:RBS) is due to unveil its third-quarter results today with investors likely to look for any potential provisions for forex-rigging fines.
*h*Footsie to open higher*h*
According to IG, the FTSE 100 index will open 22 points higher at 6485. US stocks jumped yesterday after the Department of Commerce said that gross domestic product had expanded at a 3.5 percent annual rate from July through September, ahead of forecasts of a three-percent expansion.

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“Investors were looking at the GDP number as favourable and confirmation the economy is doing well, or well enough that the Fed should be stepping back,” Paul Nolte, senior portfolio manager at Kingsview Asset Management, told CNBC. The GDP number came after the Federal Reserve ended its historic quantitative easing programme this week, while noting an improvement in the nation’s labour market.

Asian stocks tracked US markets higher this morning, with the Nikkei outperforming after the Bank of Japan unexpectedly expanded its monetary stimulus programme.
The Footsie edged higher yesterday, adding 0.15 percent to close at 6,463.55 points after having traded in negative territory earlier in the session.
“Every little pullback on the market has seen buyers rapidly come back in,” Dafydd Davies, partner at Charles Hanover Investments, commented as quoted by Reuters. “We’re quite bullish in the near term.”

Today’s macroeconomic calendar includes the October consumer price index and unemployment numbers for the eurozone, due out at 10:00 GMT. IG reports that year-on-year price growth is expected to come in at 0.4 percent for the month, with the unemployment rate unchanged at 11.5 percent.
*h*Earnings season continues with RBS*h*
RBS’ results are the highlight of today’s corporate calendar. Reuters yesterday quoted unidentified banking sources as saying that the FTSE 100 lender would announce how much it has set aside to cover potential fines for alleged manipulation of currency markets. FTSE 100 rival Barclays yesterday unveiled a £670 million provision for forex rigging fines and PPI mis-selling. (Barclays share price climbs on Q3 profit jump)
Other blue-chip companies scheduled to report today include Direct Line (LON:DLG), WPP (LON:WPP) and British Airways and Iberia parent International Consolidated Airlines (LON:IAG).

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