FTSE 100 preview: Royal Mail finals in focus

on May 21, 2015
Updated: Oct 18, 2019
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The FTSE 100 is expected to open marginally lower today, with investors digesting economic data from both sides of the Atlanic as well as earnings reports from several blue-chip companies.

Britain’s benchmark index settled above the 7,000 level for the first time in seven sessions yesterday, closing 0.17 percent, or 12.16 points, higher at 7,007.26. This morning, the Footsie is expected to open around three points lower at 7,004, according to trading platform IG.
Investors are set to continue digesting yesterday’s minutes from the Fed’s last meeting, where only small number of policymakers supported a June interest rate increase. Global markets are now looking ahead to tomorrow’s speech by the central bank’s chair, Janet Yellen, for more hints on when the central bank might raise interest rates.
In Europe, flash manufacturing and services PMI data for May will be in focus and could show the eurozone economy continuing to improve. Meanwhile, Greece continues to remain under the spotlight as reforms-for-aid talks enter critical phase with the Greek government looking for a deal by the end of May, although the prospect of the country being able to make a loan repayment to the International Monetary Fund, due on June 5, is looking less likely by the day.
On the corporate front, results announcements are due out from water company United Utilities (UU), electricity and gas distributor National Grid (LON:NG) and Royal Mail (LON:RMG). The postal services firm’s full-year figures are set to be weak as its letter delivery levels drag on sales. Pre-tax profit is projected to drop to £399.7 million from £1.6 billion last year, while revenue is set come in flat at £9.4 billion, as an increase in parcel volumes is offset by a drop in letters.
Elsewhere, US stocks closed narrowly mixed yesterday, failing to hold record levels, following the Fed minutes. The Dow Jones Industrial Average closed 0.15 percent, or 26.99 points, down at 18,285.40, pulling back from an intraday high of 2,134.72. The S&P 500 eased 0.09 percent, or 1.98 points, to 2,125.85. After touching briefly its record close of 5,092.09, the Nasdaq ended the session 0.03 percent up at 1.71 points, at 5,071.74.
In Asia, Japanese shares hit a new 15-year high today on hopes that its struggling economy was finally seeing an increase in activity, but weak factory activity in China capped stock market gains in much of the rest of Asia. After the release of stronger-than-expected gross domestic product data, Tokyo’s Nikkei 225 gained as much as 0.5 percent. As of 06:59 BST, the index was trading 0.2 percent higher at 20,201.56. Meanwhile, the MSCI’s broadest index of Asia-Pacific shares outside Japan was trading 0.45 percent lower at 625.18.
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