FTSE 100 preview: Index to benefit from US rally in early trading

on Nov 19, 2014
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iNVEZZ.com, Wednesday, November 19: The FTSE 100 Index is expected to open slightly higher today following a positive US session and choppy trading in Asia.

Yesterday the Footsie closed 0.56 percent, or 37.16 points, higher at 6,709.13 amid a wider rally across European stock markets prompted by better-than-expected German data. The German ZEW indicator of economic sentiment for November came in at 11.5 points, compared with -3.6 points in October.
According to data from IG, Britain’s benchmark index will open around six points higher in today’s session.
*h*US, Asia*h*
US equity markets enjoyed a strong trading session yesterday, with the Dow Jones Industrial Average and the S&P 500 both reaching record levels. Market sentiment was supported by the German data, which helped to ease concerns over the global economy. In addition, healthcare stocks benefitted from a $66 billion deal by Actavis for Allergan, which contributed to gains in the sector.
CNBC quoted Mark Luschini, chief investment strategist at Janney Montgomery Scott, as commenting: “We started off on a good note with the reading from the German investor confidence report, which was the biggest increase in 11 months, and European auto sales were up for a 14th consecutive month. That enthusiasm spilled over into US equity markets, where investors have been concerned about Europe.”

Luscini also highlighted a better-than-expected increase in confidence of US home-builders for November.
Yesterday the Dow Jones closed up 0.23 percent at 17687.82 points; the S&P 500 rose 0.51 to 2051.80; and the Nasdaq Composite Index gained 0.67 percent to 4702.44.
Meanwhile, Asian trading has been choppy today, with concerns over Japan’s economy prompting caution among investors. After swinging between gains and losses, Japan’s Nikkei 225 finished the day 0.32 percent lower at 17288.75 points. The Shanghai Composite Index saw a similar decline.

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*h*Data*h*
Today’s highlights from the economic calendar include the eurozone’s current account figures, due out at 09:00 UTC. At 09:30 UTC the Bank of England’s monetary policy committee will release the minutes of its last meeting, which will provide more insight into its decision to keep interest rates at record lows.
In the US, the Federal Reserve will also release minutes from its last policy meeting, but this is unlikely to have a significant impact on today’s European trading, since it will take place after the markets close.
In terms of corporate earnings releases, Royal Mail Plc (LON:RMG) and Intertek Group plc (LON:ITRK) are scheduled to update the market today.

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