FTSE 100 preview: Index set to recover after yuan-fuelled sell-off

on Aug 13, 2015

Britain’s blue-chip index looks set to open higher this morning, taking cues from the US, and clawing back some of the losses posted in the previous sessions after China moved to devalue its currency. On the corporate front, investors will await Glencore Xstrata’s (LON:GLEN) half-year production report.

CNBC reports that the FTSE 100 is expected to open 29 points higher at 6,600. Stocks in the US closed mostly higher yesterday, finding support in a recovery in the oil price which propped up energy shares. In Asia, stocks were mixed this morning, with investors digesting comments from the People’s Bank of China that there was no basis for continued currency depreciation.
China’s move to devalue its currency this week put pressure on the FTSE 100 yesterday, with the benchmark index losing 96.65 points to close 1.40 percent in the red at 6,571.19. Glencore was the biggest blue-chip faller in percentage terms, shedding 5.65 percent to 180.20p. At the other end of the spectrum was Randgold Resources (LON:RRS) whose shares rose with the yuan devaluation propping up the gold price. Randgold’s share price closed 5.41 percent higher at 4,166.00p.

Macroeconomic announcements are in short supply this morning. In the afternoon, investors will await US retail sales numbers for July as well as jobless claims, due out at 13:30 BST. IG reports that sales in the world’s biggest economy are expected to have climbed 0.5 percent month-on-month and 1.5 percent year-on-year.
On the corporate front, Glencore will post its half-year production report, while Tui Group (LON:TUI) and Coca-Cola HBC (LON:CCH) will update investors on their recent performance. As many as 18 FTSE 100 companies, including Shell (LON:RDSA), BT (LON:BT.A) and Lloyds (LON:LLOY), are going ex-dividend today. Reuters calculations suggest that ex-divs would knock around 34 points off the Footsie.

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