FTSE 100 preview: Upbeat start on the cards after China data

on Nov 1, 2016

The UK benchmark index looks set to kick off November on an upbeat note, boosted by encouraging data out of China. Oil majors Royal Dutch Shell (LON:RDSA) and BP (LON:BP) are scheduled to update investors on their performance this morning.

IG’s opening calls suggest that the Footsie will start the day six points higher at 6,960. The miner-heavy index is likely to gain ground after China’s official manufacturing purchasing managers index (PMI) and the private Caixin manufacturing PMI showed strong results. Asian shares, however, have been mixed this morning, with investors also focusing on the Reserve Bank of Australia’s and the Bank of Japan’s decisions to leave monetary policy unchanged.

In the US, stocks retreated last night, with weaker oil and the investigation into Hillary Clinton’s emails keeping investors on edge.
“The market has been pricing in a Hillary Clinton victory and that got thrown into disarray,” said Randy Frederick, vice president of trading and derivatives at Charles Schwab, as quoted by CNBC. “I think everybody is going to be glued to the news with this Hillary Clinton email scandal.”

In the UK, the FTSE 100 shed 42.02 points to end the last day of October 0.60 percent lower at 6,954.22. The index, however, posted a rise for the month, finding support in a weaker pound.
Today’s macroeconomic calendar includes the preliminary UK Markit PMI for October, due out at 09:30 GMT. IG reports that economists expect a reading of 54.4, down from 55.4 in September.
On the corporate front, both BP and Shell are scheduled to post their third-quarter results this morning. Sharecast reports that BP is expected to reveal that its profits more than halved in the three months to September, while Shell’s underlying profits are expected to have slipped to $1.7 billion, compared to $1.8 billion in the same period last year. Other blue-chips reporting today include Shire (LON:SHP) and Standard Chartered (LON:STAN).

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