FTSE 100 preview: Index to open lower ahead of ECB meeting

on Oct 22, 2015

The UK benchmark index looks set to open in negative territory this morning with investors staying cautious ahead of the European Central Bank’s (ECB) rate decision. In other news, the Competition and Markets Authority (CMA) is due to publish its report on the UK retail banking market.

CNBC reports that the FTSE 100 is expected to open 27 points lower at 6,321. Sentiment is likely to be subdued ahead of the ECB’s policy meeting with investors likely to focus on comments about the existing quantitative easing scheme.
In the US, stocks closed in the red last night as traders digested a fresh batch of corporate earnings. Asia-Pacific markets have been mixed this morning, pressured by the downbeat US handover.
“I think the rebound in markets is coming to an end,” Hirokazu Kabeya, chief global strategist at Daiwa Securities, told Reuters. “From now, markets will be looking to policy events later this month as well as corporate earnings.”
At home, the Footsie was little changed yesterday, adding 29 points to close 0.05 percent higher at 6,348.42p amid mixed corporate releases. Pearson (LON:PSON) was the biggest blue-chip faller in percentage terms, slumping 15.95 percent to 998.50p, after trimming its full-year earnings outlook.
Today’s macroeconomic releases include UK retail sales for September, due out at 09:30 BST. The ECB interest rate decision will be announced at 12:45 BST, while the press conference is scheduled to start at 13:30 BST.
FTSE 100 companies reporting today include Travis Perkins (LON:TPK) and Anglo American (LON:AAL). Investors, however, are also likely to focus on banking stocks with the CMA expected to unveil proposals to boost competition in the retail banking sector. The report, seen by The Times, will stop short of ordering the break-up of Lloyds (LON:LLOY) and RBS (LON:RBS).
Blue-chip companies, whose shares will be trading without the attraction of their latest dividend today, include BAE Systems (LON:BA), Capita (LON:CPI), HSBC (LON:HSBA), Intu Properties (LON:INTU), Rolls-Royce (LON:RR), Sky (LON:SKY), Smiths Group (LON:SMIN) and Wolseley (LON:WOS). Reuters calculations suggest that ex-divs would knock 8.91 points off the Footsie.

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