FTSE 100 preview: Index set for recovery as investors await earnings

on Apr 30, 2015

The Footsie is expected to open higher this morning after the US Federal Reserve statement provided no new guidance on the timing of a rate hike. Investors are likely to focus on a slew of corporate earnings, including quarterly updates from Royal Bank of Scotland Group (LON:RBS) and Royal Dutch Shell (LON:RDSA).

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CNBC reports that the FTSE 100 is seen opening 20 points higher at 6,966. US stocks closed lower yesterday following the Fed statement and weak first-quarter gross domestic product data which fell short of analyst expectations.
“The investor takeaway is the Fed is very much sensitive to what is happening in the economy,” Alan Rechtschaffen, financial advisor and senior vice president at UBS Wealth Management Americas, commented, as quoted by CNBC.
In Asia, stocks tracked the US lower. The Bank of Japan this morning kept its monetary policy unchanged, maintaining is massive stimulus programme.
The FTSE 100 lost 84.25 points to close 1.20 percent lower at 6,946.28 yesterday, dragged lower by disappointing corporate earnings. The blue-chip index extended earlier losses following the downbeat US GDP data.
“The disappointing GDP headline seems to be the pretext used by equity investors to take some profits,” Tristan Abet, cross-asset strategist at Louis Capital Markets, told Reuters. “The malaise is well known: equity indices have gone well ahead of the reality. A pull-back is simply a ‘normal event’.”
Today’s macroeconomic data include German unemployment numbers for April, due out at 08:55 BST, followed by US initial jobless claims at 13:30 BST. Investors have a lot to look forward to on the corporate front today. RBS, Shell, Shire (LON:SHP), Smith & Nephew (LON:SN), International Consolidated Airlines (LON:IAG) and Schroders (LON:SDR) are all due to update the market on their recent performance.
Blue-chip companies whose shares will be trading without the attraction of their latest dividend today include Centrica (LON:CNA), Fresnillo (LON:FRES), ITV (LON:ITV), Merlin Entertainments (LON:MERL), Reed Elsevier (LON:REL), Travis Perkins (LON:TPK) and The Weir Group (LON:WEIR). Reuters calculations suggest that ex-divs would knock 4.51 points off the FTSE 100.


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