FTSE 100 preview: Index set for recovery in quiet day

on Sep 7, 2015

Britain’s blue-chip index looks set to open higher this morning, recouping some of Friday’s losses triggered by the US jobs data which pointed to a potential rate hike by the US Federal Reserve as early as this month. On the corporate front, Primark owner Associated British Foods (LON:ABF) is due to update investors on its recent performance.

CNBC reports that the FTSE 100 is set to open 57 points higher at 6099. Asian stocks traded mixed this morning, with China’s markets volatile after a four-day weekend. In the US, stocks tumbled more than one percent on Friday, ahead of a long weekend, amid speculation of a rate hike after data showed that nonfarm payrolls had increased 173,000 last month. While the number was lower than expected, the nation’s unemployment rate dropped to 5.1 percent, its lowest level in more than seven years.

The Footsie lost 151.18 points to close 2.44 percent lower at 6,042.92, with investors digesting the mixed US jobs report.
“The most obvious implication of today’s jobs report, which I would view as a net positive for the US economy, is that it leaves a September rate hike from the Federal Reserve on the table, so that potential for higher interest rates, even in the US, is something that is really hitting stock markets around the world,” Matt Weller, senior market analyst at GAIN Capital, told Reuters.
There are no major macroeconomic announcements out of Europe this morning, while the US market is closed for Labour Day. AB Foods is the only blue-chip company reporting this morning. Investors are also likely to keep an eye on Tesco (LON:TSCO) amid reports that Britain’s biggest grocer is poised to announce the sale of its Homeplus business in South Korea.
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