FTSE 100 preview: Lacklustre start ahead as investors eye Fed minutes

on Oct 8, 2015

The UK benchmark index is expected to open marginally higher this morning with investors staying cautious ahead of the minutes from the Federal Reserve’s latest policy meeting. The Footsie closed at its highest level since August yesterday, finding support in mining stocks.

CNBC reports that the FTSE 100 is expected to open nine points higher at 6,345. Investors will look out for the minutes from the Fed’s September policy meeting when the US central bank opted not to hike rates amid cooling global growth and concerns about China’s economy.
“Although many market participants have shifted their expectations of a Fed hike out to March 2016, many Fed officials themselves continue to signal the likelihood of a rate hike before the end of the year,” Marc Chandler, global head of currency strategy at Brown Brothers Harriman, said, as quoted by Reuters.

US stocks rose last night, buoyed by gains in the energy and healthcare sectors. Asian shares have been mixed this morning, with Chinese equities outperforming the region following a week-long holiday.
At home, the FTSE 100 added 10.19 points to close 0.16 percent higher at 6,336.35, with a recovery in commodity prices propping up London-listed miners. Anglo American (LON:AAL) was the biggest gainer in percentage terms, closing 9.98 percent higher at 664.50p.
“The FTSE has finally pushed its way through the 6,300 level for the first time since late August,” Brenda Kelly, head analyst at London Capital Group, told Reuters. “This is more than a little bullish and tends to set the scene for a bigger move higher should the momentum carry.”
Central banks will dominate the macroeconomic agenda today, with the Bank of England’s rate decision and statement due out at 12:00 BST, followed by the minutes from the European Central Bank’s latest policy meeting. The Fed minutes are due out at 19:00 BST, after the UK market closes.
No FTSE 100 companies are due to update investors on their recent performance this morning. Blue-chip companies, whose shares will be trading without the attraction of their latest dividend in today’s session include Aviva (LON:AV), Kingfisher (LON:KGF), Next (LON:NXT), Smith & Nephew (LON:SN), Travis Perkins (LON:TPK) and WPP (LON:WPP). Reuters calculations suggest that ex-divs would knock 2.90 points off the Footsie.

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