FTSE 100 preview: Index looking up as oil bounces

on May 5, 2016

The UK benchmark index looks set to start the day on the front foot, shrugging off downbeat leads from the US and Asia, amid a recovery in the oil price. Investors have a string of corporate releases to look out for today, including results by former telecoms monopoly BT Group (LON:BT.A) and Wm Morrison Supermarkets (LON:MRW).

IG’s opening calls suggest that the FTSE 100 will start the day 22 points higher at 6,134. Oil has regained some ground this morning amid a huge wildfire in Canada which disrupted oil sands production, and tension in Libya which is seen weighing on the country’s crude output.
Sentiment in Asia meanwhile has been impacted by China’s Caixin/Markit services purchasing managers’ index (PMI) which dropped to 51.8 last month, from 52.2 in March. Stocks in the US closed in the red last night on the back of mixed data.

At home, the Footsie lost 73.57 points to close 1.19 percent lower at 6,112.02 following a selloff in mining shares which tracked metals prices lower. Randgold Resources (LON:RRS), which also updated the market on its quarterly performance, was the biggest blue-chip faller in percentage terms, shedding 11.73 percent to 5,830.00p.
On the macroeconomic front, investors will look out for the UK services PMI for April, due out at 09:30 BST. IG reports that growth in the sector is expected have weakened, with the index having slipped to 53.2 from 53.7.
On the corporate front, BT will post its full-year results this morning while Morrisons is scheduled to update investors on its first-quarter performance. Other blue-chip companies reporting today include The Sage Group (LON:SGE), Smith & Nephew (LON:SN), RSA Insurance (LON:RSA) and Provident Financial (LON:PFG).
FTSE 100 companies whose shares will be trading without the attraction of their latest dividend in today’s session include BP (LON:BP), Kingfisher (LON:KGF) and London Stock Exchange Group (LON:LSE). Reuters calculations suggest that ex-divs would knock 5.78 points off the blue-chip index.

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