FTSE 100 preview: Index looking up as oil gains ground

on Aug 15, 2016

The UK benchmark index looks set to kick off the week on an upbeat note, finding support in firmer oil prices, despite lacklustre leads from the US and Asia. Anglo American (LON:AAL) will be in focus on the corporate front today amid reports that the group is under pressure to hive off its South African business.

IG’s opening calls suggest that the FTSE 100 will start the week 12 points higher at 6,928. Oil has inched higher this morning, and is now 10 percent up this month ahead of an upcoming OPEC meeting in September. US stocks closed mostly lower on Friday, pressured by disappointing data.
“The market has been on a tear and it got a little bit ahead of itself,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott, as quoted by CNBC. “I think what you’re seeing here is some profit-taking and people squaring their books before the weekend.”
Asian stocks meanwhile have been mostly higher this morning, with Japan underperforming the region after data showed that the world’s third-largest economy had failed to grow in the second quarter of the year.
The Footsie closed little changed on Friday, adding 1.31 points to end the session 0.02 percent higher at 6,916.02. Miners weighed on the index, pressured by disappointing data out of China, the world’s top metals consumer. Antofagasta (LON:ANTO) was the biggest blue-chip faller in percentage terms, shedding 3.38 percent to close at 514.00p.
There are no major macroeconomic releases out of Europe this morning. In corporate news, The Sunday Times reported yesterday that Anglo American was under pressure from its top investor to hive off its South African operations in a move which could herald the break-up of the mining giant.

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