FTSE 100 preview: Index looking up after cautious Fed

FTSE 100 preview: Index looking up after cautious Fed

The UK benchmark index looks set to open in positive territory this morning, after the US Federal Reserve reduced the number of rate hikes expected this year. In company news, Rio Tinto (LON:RIO) has unveiled a change at the top.

IG’s opening calls suggest that the Footsie will start the day 18 points higher at 6,194. The FTSE 100 is expected to open higher alongside other European indices after the Fed left interest rates unchanged yesterday and trimmed its projections for the number of rate hikes this year from four to two. The bank’s stance propped up shares on the other side of the Atlantic last night, while Asian stocks have tracked the US higher this morning.

“This was far more dovish than markets had expected, resulting in sharp rallies in commodities, emerging markets and commodity-related currencies,” Angus Nicholson, market analyst at IG, said in a morning note.
In the UK, the Footsie added 35.52 points to close 0.58 percent higher last night, finding support in oil and gas stocks and housebuilders which rallied on the back of proposals in Chancellor of the Exchequer George Osborne’s annual budget statement.
Today’s macroeconomic calendar includes the eurozone’s trade balance for January, as well as the region’s consumer price index for February, due out at 10:00 GMT. IG reports that the eurozone’s inflation rate is expected to have dropped to -0.2 percent year-on-year from 0.3 percent. The Bank of England monetary policy decision is scheduled to be announced at 12:00 GMT, with no changes expected.
In corporate news, Rio Tinto has named Jean-Sébastien Jacques as its new chief executive, replacing Sam Walsh. Jacques, who is head of the miner’s Copper & Coal business, will take over the reins on July 1.
Blue-chip companies going ex-dividend today include British American Tobacco (LON:BATS), Hammerson (LON:HMSO) and Randgold Resources (LON:RRS). Reuters calculations suggest that ex-divs would knock 8.16 points off the FTSE 100.

By Alice Young
Alice joined the Invezz team after motherhood convinced her to make a career change from actuary-ing. She brings a forensic eye for detail developed through crunching numbers on underwriting satellite insurance and the like.
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