FTSE 100 preview: Index set for positive start as US ends losing streak

on Mar 30, 2015

The FTSE 100 Index is expected to open higher today, benefitting from positive momentum generated across US and Asian markets. On Friday the index closed 0.58 percent, or 40.31 points, lower at 6,855.02. According to data from spread bettor IG, the Footsie will open around 34 points higher in today’s trading session.

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US equity markets saw choppy trading on Friday, but eventually closed higher, putting an end to a four-day losing streak. The gains came amid comments from US Federal Reserve chair Janet Yellen, who remained cautious about an interest rate hike ahead of the start of first-quarter earnings season in April.
“She’s showing that the Fed is not in any rush to raise rates in a fast clip,”commented Peter Cardillo, chief market economist at Rockwell Global Capital, as quoted by CNBC. “If you do it in increments… it’s going to be meaningless for the market.”
According to some analysts, the timeframe for a return to higher rates would depend on the upcoming US jobs report on Friday. If the report is better-than-expected, it could put June back in play for the first rate hike from the Fed. Conversely, a weaker report could confirm expectations for a slower implementation of rate hikes.
The Dow Jones Industrial Average closed up 0.19 percent on Friday at 17712.66 points; the S&P 500 ended the session 0.24 percent higher at 2061.02 and the technology-heavy Nasdaq Composite Index rose 0.57 percent to 4891.22p.
Asian equity markets have been mostly higher in today’s trading, with the exception of Australia, where the resources sector was hit by falling commodities prices. In Japan, investors shrugged off disappointing factory output data, with the Nikkei 225 benchmark up 0.7 percent at 19,420.91 points, as of 06:53 BST. In mainland China, the Shanghai Composite Index has jumped two percent after comments from the People’s Bank of China over the weekend spurred hopes that further stimulus could be on the cards.
“They said that growth is on the lower side so maybe there’s a need to do something. It’s very consistent with what they’ve been highlighting in terms of stimulus. So, we think there’s more to come from China,” Herald Van Der Linde, head of Equity Strategy, Asia-Pacific at HSBC, told CNBC.
Back in Europe, the campaign for the forthcoming UK general election in May will begin today, as the Queen dissolves parliament at Prime Minister David Cameron’s request. A raft of sentiment data, including business and consumer confidence for Spain, Italy and the eurozone as a whole, is due to be released at between 09:00 BST and 10:00 BST. Also, Spanish and German inflation data for March is expected at 08:00 BST and 13:00 BST, respectively. In terms of corporate earnings releases, Compass Group Plc (LON:CPG) is the only FTSE 100 company scheduled to update the market.


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