FTSE 100 preview: Index to extend gains amid global rally

on Feb 4, 2015

The FTSE 100 is expected to open in positive territory this morning, building on yesterday’s gains, taking leads from Asia and the US where stocks found support in this week’s recovery in the oil price and alleviation of concerns about Greece. In corporate news, GlaxoSmithKline (LON:GSK) is scheduled to update markets on its fourth-quarter performance.

According to IG, Britain’s blue-chip index will open 21 points higher at 6892. The Footsie is expected to take cues from the US where the Dow, the S&P and the Nasdaq all closed more than one percent higher benefitting from a rally in oil prices and hopes for a deal over Greece’s €315 billion (£240 billion) debt.
“We’ve got a continuation of strength,” Art Hogan, chief market strategist at Wunderlich Securities, told CNBC. “Looks like the two major drivers of yesterday’s strength are still with us today.”

Asia-Pacific stocks joined the global rally this morning, with the Nikkei 225 outperforming peers on the back of a weaker yen.
The FTSE 100 added 89.25 points to close 1.32 percent higher at 6,871.80 yesterday, getting a boost from energy stocks.
“I am very impressed by how this market is breaking to the upside,” Beaufort Securities’ sales trader Basil Petrides said, as quoted by Reuters. “The respite in the slide of the oil price is giving us some breathing space.”

Today’s macroeconomic calendar includes Markit’s composite Purchasing Managers’ Index (PMI) data for the eurozone due out at 09:00 GMT, followed by the UK services PMI at 09:30 GMT. On the earnings front, investors will look out for half-year updates from Sky (LON:SKY) and Hargreaves Lansdown (LON:HL) this morning, whileGSK traditionally posts its results at noon. ShareCast reports that the City expects the pharma giant’s earnings per share to have fallen four percent to 91.1p amid falling sales of its flagship asthma drug Advair.

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