FTSE 100 preview: Muted start ahead as oil price retreats

on Apr 4, 2016

The UK benchmark index is expected to kick off the week marginally lower, pressured by a dip in the oil price and following a mixed handover from Asia. Banking stocks are likely to be in focus today with experts flagging further costs for mis-sold payment protection insurance (PPI).

IG’s opening calls suggest that the FTSE 100 will start the day five points in the red at 6,142. A fall in the oil price is expected to weigh on sentiment with leading Middle East producers failing to reach an agreement to curb supply. Asian shares have been mixed this morning, with Japan underperforming the region on the back of a lower dollar/yen pair.
In the US, stocks closed higher on Friday following a better-than-expected US jobs report. The world’s biggest economy added 215,000 new jobs last month, surpassing expectations for 205,000 positions.

“I think the combination of a solid jobs report and better manufacturing has helped the market move higher,” said Kate Warne, investment strategist at Edward Jones, as quoted by CNBC.
In the UK, the Footsie lost 28.85 points to close 0.47 percent lower at 6,146.05 on Friday. Reuters quoted traders as pointing to the fact that the US unemployment rate had increased to five percent from an eight-year low of 4.9 percent which made it more likely that the Federal Reserve may refrain from further interest rate rises in the near future, while also taking the shine off the generally solid-looking US data.
Today’s macroeconomic releases include eurozone unemployment data for February, due out at 10:00 BST. The UK construction purchasing managers’ index for March is scheduled to be released at 09:30 BST. In other news, the Financial Times reported this morning that banks faced at least another £22 billion in PPI payouts.

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