FTSE 100 preview: Index expected to open higher despite US slump

on Jan 28, 2015

The FTSE 100 Index is expected to open higher today, ahead of the announcement of the US Federal Reserve’s policy decision later in the day. Britain’s benchmark equity index closed yesterday’s trading session 0.6 percent or 40.79 points down, with investor sentiment dampened by a negative US market. According to sentiment data from spread bettor IG, the Footsie will open around 43 points higher today.

US equity markets finished deeply in the red yesterday after a number of the country’s largest companies reported quarterly results that disappointed investors. Software giant Microsoft Corp (NASDAQ:MSFT) plummeted 9.3 percent following the company’s second-quarter report on Monday which showed that its earnings had been hit by a stronger dollar and a slowdown in commercial licensing. Caterpillar Inc (NYSE:CAT) was another notable faller, closing down 7.2 percent.Adding to the sombre mood, a report showed that US business equipment orders fell 3.4 percent in December, which highlighted the impact of the slowing global economy on US multinationals.

The Dow Jones Industrial Average yesterday closed 1.65 percent lower at 17387.21 points; the S&P 500 declined 1.34 percent to 2029.55 and the Nasdaq Composite Index finished down 1.89 percent at 4681.50.
Most equity markets in Asia followed the negative trend from the US before rebounding to enter positive territory towards the end of today’s trading session. Bucking the trend was the Shanghai Composite Index, which was 1.09 percent lower at 3,316.34 points as of 06:18 UTC. Japan’s Nikkei 225 closed 0.15 percent higher at 17,795.73 points, while Hong Kong’s Hang Seng Index advanced 0.33 percent at 24,888.00.
With no major economic data releases coming from Europe today, investors’ attention will be on the Fed’s policy decision, which will be announced at 19:00 UTC. As for corporate reports, Johnson Matthey Plc (LON:JMAT) is to release a trading statement for the third quarter, while miners Anglo American Plc (LON:AAL) and Antofagasta Plc (LON:ANTO) will publish fourth-quarter production figures.

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