FTSE 100 preview: Fall in oil and Brexit concerns to weigh on index

on Jun 10, 2016

The UK benchmark index looks set to start the last trading day of the week on the back foot, pressured by a pullback in oil, and concerns related to the upcoming EU referendum later this month. On the corporate front, BP (LON:BP) has struck natural gas off the coast of Egypt.

IG’s opening calls suggest that the Footsie will start the day 11 points in the red at 6,221. The index is likely to take cues from Asia, where stocks stumbled amid a fall in oil. Uncertainty over the outcome of the UK’s EU referendum in less than two weeks is also weighing on sentiment.
“There are concerns over ‘Brexit’ as polls seem to suggest the probability of Britain leaving Europe is rising,” Tatsushi Maeno, managing director at PineBridge Investments, told Reuters. “You can’t buy risk assets under such conditions even if you want to.” US stocks also closed in the red last night, ending a three-session winning streak.

At home, the Footsie gave up 69.63 points to close 1.10 percent lower at 6,231.89 yesterday, pressured by a selloff in miners on the back of lower commodity prices. Antofagasta (LON:ANTO) was the biggest blue-chip faller in percentage terms, closing 6.27 percent in the red at 423.40p.
Today’s macroeconomic calendar includes Germany’s consumer price index for May, due out at 07:00 BST. Canada’s employment numbers for May are scheduled to be released at 13:30 BST, to be followed by the preliminary June Michigan consumer confidence index in the US at 15:00 BST. While there are no blue-chip companies scheduled to update investors on their performance this morning, shares in BP are likely to be in focus as the company announced a significant natural gas discovery off the Egyptian coast.

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