FTSE 100 preview: Muted start ahead as normality returns to markets

on Aug 28, 2015

The UK benchmark index is expected to open marginally higher this morning, taking a breather from yesterday’s rally, with one of the most volatile trading weeks in history drawing to a close. The FTSE 100 soared in the previous session after US growth data beat expectations and overshadowed concerns about China’s economy.

IG’s opening calls suggest that Britain’s blue-chip index will start the session seven points higher at 6199. US stocks closed higher for a second consecutive session last night after data showed that the nation’s gross domestic product (GDP) had expanded at a 3.7 percent annual pace beating the initial 2.3 percent estimate. The better-than-expected number helped calm investors in the wake of this week’s global market sell-off triggered by China-led global economy concerns. Asian stocks also rose this morning, taking cues from the US.

“We should see more investor appetite for riskier assets today, given the positive leads from the overnight markets. However, the market may be wary of putting in sizable positions ahead of the weekend,” IG market analyst Bernard Aw said in a morning note. “Nonetheless, it is clear that the mood has shifted to calmer waters.”
At home, the Footsie added 212.83 points to close 3.56 percent higher at 6,192.03 yesterday, as investors cheered the better-than-expected US growth data. Miners led the index higher, with Anglo American (LON:AAL) posting the biggest gains in percentage terms, closing 9.33 percent higher at 726.30p.
Today, investors will look out for the second estimate of the UK’s second-quarter GDP, due out at 09:30 BST. IG notes that the number is expected to stay unchanged at 2.6 percent from the initial reading. No blue-chip companies are due to update investors on their recent performance this morning.

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