FTSE 100 preview: Muted start ahead as investors eye central bank decisions

on Mar 14, 2016

The UK benchmark index looks set to start today’s session little changed from Friday’s close, with investors eyeing several central bank meetings during the week, after the European Central Bank (ECB) unveiled aggressive easing measures last week. In company news, Royal Bank of Scotland (LON:RBS) is preparing to shed 500 jobs.

IG’s opening calls suggest that the Footsie will open one point higher at 6,141. With no major releases out of Europe this morning, investor attention is already turning to central bank meetings, with the Bank of Japan’s rate decision due out tomorrow morning, and the US Federal Reserve starting a two-day meeting later on Tuesday. The Bank of England meanwhile is due to meet on Thursday.
On the other side of the Atlantic stocks closed higher on Friday, with investors cheering higher oil prices. Asian shares have tracked the US higher this morning.

“Risk sentiments have improved noticeably for a couple of weeks now, although I feel the rebound is somewhat jerky and lacks fundamental underpinnings,” Bernard Aw, market analyst at IG, said in a morning note.
In the UK, the FTSE 100 added 103.09 points to close 1.71 percent higher at 6,139.79, led higher by financials, which found support in ECB President Mario Draghi’s stimulus package.
“We turned positive on financials last week and they should get some relief from profitability concerns linked to negative interest rates, after Mr. Draghi indicated further rate cuts were less likely,” Credit Suisse analysts said, as quoted by Reuters.
There are no major macroeconomic announcements this morning, and no FTSE 100 companies are scheduled to update investors on their recent performance. Banking stocks, however, are likely to be in focus with RBS preparing to cut its face-to-face advice service. Bailed-out peer Lloyds Banking Group (LON:LLOY) meanwhile has flagged concerns over the UK’s potential exit from the EU.

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