FTSE 100 preview: Index called lower ahead of Fed meeting

on Jun 13, 2016
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The UK benchmark index looks set to start the week on the back foot, with investors staying on the sidelines ahead of this week’s Federal Reserve policy meeting. Rio Tinto (LON:RIO) will likely be in focus today amid reports that it mulls a takeover of its £8-billion listed copper operation.

IG’s opening calls suggest that the Footsie will start the day 39 points in the red at 6,077. Sentiment is likely to be subdued today ahead of the Fed’s monetary policy decision on Wednesday. Stocks in the US closed in negative territory on Friday, pressured by concerns over the upcoming EU referendum in the UK.
“I think some of this today is ‘Brexit,’ some of it is global growth concerns, some of it’s the Fed,” said John Canally, chief economic strategist at LPL Financial, as quoted by CNBC. “Clearly the ‘Brexit’ vote has not been priced in until the last couple of days.” Asian shares have slipped lower this morning ahead of the Fed meeting.

At home, the Footsie lost 116.13 points to close 1.86 percent lower on Friday, pressured by sell-off in miners and financial stocks amid uncertainty ahead of the EU referendum. Standard Life (LON:SL) was the biggest blue-chip faller in percentage terms, shedding 4.36 percent to 316.20p, after analysts at UBS cut their price target on the stock.
There are no major macroeconomic releases out of Europe this morning, and no blue-chip companies are scheduled to update investors on their recent performance. Shares in Rio Tinto, however, will likely be in focus after The Sunday Times reported yesterday that the FTSE 100 miner had hired Goldman Sachs to engineer a takeover of its £8-billion listed copper operation as it seeks to position itself for a recovery in commodity prices.

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