FTSE 100 preview: Index looking up after Fed minutes

on Aug 18, 2016

The UK benchmark index looks set to start the day on an upbeat note, with investors digesting the minutes from the latest Federal Reserve policy meeting, released last night. With the earnings season winding down, Kingfisher (LON:KGF) is the only FTSE 100 company scheduled to update investors on its recent performance.

IG’s opening calls suggest that the Footsie will start the day 39 points higher at 6,898. The FTSE 100 is expected to advance alongside other European indices, tracking the US higher, after the Fed minutes showed that policymakers had “judged it appropriate to continue to leave their policy options open”.
“Right now, observers think a September policy rate hike is off the table,” Richard Clarida, global strategic advisor at bond giant PIMCO, wrote in a blog, as quoted by Reuters. US stocks closed mostly higher last night, while Asian shares have been mostly positive this morning.
At home, the FTSE 100 lost 34.77 points to end the session 0.50 percent lower at 6,859.15. Admiral Group (LON:ADM) proved a drag on the blue-chip index, shedding 7.68 percent to 2,081.00p, after revealing that the Brexit vote had hit its solvency ratio.
Today’s macroeconomic releases include UK retail sales for July, due out at 09:30 BST. IG reports that sales are expected to have risen four-percent year-on-year, down from 4.3 percent in June, and are forecast to have dropped 0.3 percent month-on-month, marking an improvement over June’s 0.9-percent fall. On the corporate front, Kingfisher is scheduled to post its second-quarter trading update this morning.
FTSE 100 companies, whose shares will be trading without the attraction of their latest dividend in today’s session, include British American Tobacco (LON:BATS), Imperial Brands (LON:IMB), Legal & General (LON:LGEN), Mondi (LON:MNDI), Pearson (LON:PSON), Reckitt Benckiser (LON:RB) and Schroders (LON:SDR). Reuters calculations suggest that ex-divs will knock 7.81 points off the blue-chip index.

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