FTSE 100 preview: Upbeat start ahead as investors digest Fed minutes

on Apr 7, 2016

Britain’s blue-chip index looks set for a positive start this morning following the release of the Federal Reserve’s minutes last night. On the corporate front, Marks & Spencer (LON:MKS) is scheduled to update investors on its quarterly performance ahead of its full-year results next month.

IG’s opening calls suggest that the Footsie will start the day 11 points higher at 6,173. The benchmark index is expected to track the US higher following the release of the minutes from the Fed’s latest meeting which showed that several policy makers had expressed caution over an April rate hike.
“The release of the Fed minutes overnight largely confirmed that there will not be a rate rise in April, and there’s little in the statement or recent US data that pushes strongly for a rate rise in June either,” Angus Nicholson, market analyst at IG said, as quoted by CNBC.

The FTSE 100 rallied yesterday, adding 70.40 points to close 1.16 percent higher at 6,161.63. Shire (LON:SHP) and AstraZeneca (LON:AZN) posted the biggest gains in percentage terms amid speculation that US pharma giant Pfizer might look at London-listed drugmakers as potential acquisition targets following the collapse of its merger with Allergan.
Macroeconomic releases are in short supply today, with the US initial jobless claims due out at 13:30 BST. M&S is the only Footsie company scheduled to update investors on its performance this morning. The blue-chip retailer is largely expected to unveil yet another quarterly sales drop at its troubled general merchandise division. The pharma sector is likely to remain in focus today after Shire confirmed last night that it would proceed with its acquisition of US peer Baxalta despite the US Treasury’s move to impose new rules on tax inversion deals.
FTSE 100 companies whose shares are going ex-dividend today include Aviva (LON:AV), GKN (LON:GKN), Lloyds (LON:LLOY), Pearson (LON:PSON), Rexam (LON:REX), St James’s Place (LON:STJ) and Taylor Wimpey (LON:TW). Reuters calculations suggest that ex-divs would take 9.46 points off the blue-chip index.

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