FTSE 100 preview: Oil prices to continue to weigh on index

on Dec 11, 2015

The FTSE 100 closed yesterday’s trading session 38.63 points lower at 6,088.05, as the Bank of England (BoE) left interest rates unchanged. This morning, the UK benchmark index is expected to shed a further 14 points, kicking off at 6,074.

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Asian markets have seen mixed trading today, despite Wall Street’s positive finish overnight, as record low oil prices weighed on energy, material and industry sectors. Global stock markets are on track to end the week deep in the red, with both Brent crude and West Texas Intermediate trading below 40 dollars a barrel. The International Energy Agency (IEA) releases its latest oil market report today.

Investors will also eye a couple of data releases from the US today. According to estimates ahead of the report from the Commerce Department, US retail sales rose 0.3 percent in November from a year ago. The University of Michigan’s consumer confidence report is also due out today. Analysts expect a preliminary estimate of the sentiment index to increase to 92 in December from 91.3 in November.

The US economic data comes ahead of the Federal Reserve’s policy meeting on 15-16 of December. The Fed, which is monitoring data closely, is widely expected to raise interest rates.

In the UK, the Bank of England and GfK will publish its Inflation Attitudes Survey, a day after the central bank decided to keep interest rates unchanged amid low inflation.

The day will be quiet in terms of corporate releases, with no blue-chip companies scheduled to release updates today. Traders will digest news that International Consolidated Airlines (LON:IAG) has threatened to give up on Heathrow and move overseas after warning that passenger charges will double to pay for a “gold-plated” third runway. Elsewhere, Lloyds Banking Group (LON:LLOY) has provoked furious criticism after it won a court battle that means it can avoid paying about £1 billion in interest to bondholders.


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