FTSE 100 preview: Rally set to pause after downbeat China data

on Aug 12, 2016

The UK benchmark index looks set to open lower this morning, shrugging off upbeat leads from the US and Asia, with the latest economic data out of China missing forecasts. Lloyds Banking Group (LON:LLOY) will be in focus on the corporate front, with investors fretting who could replace the lender’s chief executive.

IG’s opening calls suggest that the Footsie will start the day five points lower at 6,909. The index is likely to take a breather, having climbed above the 6,900-point mark, as China’s retail sales and industrial output missed expectations. US shares surged last night, propped up by strong gains in oil, while Asia has mostly tracked the US higher this morning.
At home, the FTSE 100 gained 48.29 points to close 0.70 percent higher at 6,914.71, marking the index’ sixth consecutive session of gains, as oil recovered.

“There’s been a big turnaround in oil which has helped the likes of BP and the FTSE in general,” said Central Markets’ trading analyst Joseph Neighbour, as quoted by Reuters. Coca-Cola HBC (LON:CCH) was the biggest blue-chip riser in percentage terms, adding seven percent to 1,681.00p, as investors welcomed the group’s interim update.
Investors have a lot to look forward to on the macroeconomic front today, with the flash German second-quarter gross domestic product (GDP) due out at 07:00 BST, to be followed by the second estimate for the eurozone’s second-quarter GDP at 10:00 BST. In the US, retail sales and producer prices data for July are scheduled to be released at 13:30 BST. In corporate news, Reuters reported yesterday that top investors at Lloyds were concerned that chief executive Antonio Horta-Osório might leave the bank sooner than anticipated following press scrutiny of his private life, and wanted the lender’s board to start looking for a successor.

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