FTSE 100 preview: Muted start on the cards as Fed meeting looms

on Dec 14, 2015

The UK benchmark index looks set to kick off the week marginally in the red following downbeat leads from the US and Asia, and ahead of the highly-anticipated Federal Reserve meeting later during the week when the US central bank is largely expected to hike interest rates for the first time in a decade. The Footsie hit a 10-week low on Friday, dragged lower by stocks with exposure to South Africa.

CNBC reports that the FTSE 100 is seen opening three points lower at 5,952.78. US stocks closed posting sharp losses on Friday, as oil prices hit near-seven-year lows and with investors weighing the prospects of a rate hike.
“It’s a nervous market here and that’s moving due to the fact I think the market wants to hear from the Fed its intentions of future rate hikes,” said Peter Cardillo, chief market economist at First Standard Financial, as quoted by CNBC. “Oil [is] barely hanging in above $36. If we dip underneath, that could add to the selling pressure.”
Asian stocks have retreated this morning, tracking the US lower. China has bucked the trend with the People’s Bank of China guiding the currency lower, setting the yuan/dollar official midpoint at its weakest since July 2011.
At home, the Footsie shed 135.27 points to close 2.22 percent lower at 5,952.78, slipping below the 6,000-point mark. Old Mutual (LON:OML) posted the biggest losses in percentage terms, closing 10.62 percent in the red at 155.70p on account of its exposure to South Africa where President Jacob Zuma removed Nhlanhla Nene as finance minister.
Today’s macroeconomic calendar includes the UK consumer price index (CPI) for November due out at 09:30 GMT, followed by Germany’s ZEW economic sentiment index for December. The US CPI for November is scheduled to be released at 13:30 GMT.
There are no companies scheduled to update the market on their performance this morning. Banks are likely to be in focus today amid reports that Royal Bank of Scotland (LON:RBS) mislead thousands of savers about cash held in dormant bank accounts, while blue-chip peer HSBC Holdings (LON:HSBA) is thought to have held talks with Canadian officials about relocating its headquarters from London to Toronto.

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