FTSE 100 preview: Sharp fall ahead as Trump closes in on US presidency

on Nov 9, 2016

The UK benchmark index looks set for a Brexit-like slump this morning, with investors digesting the real possibility of Donald Trump winning the race for the White House. On the corporate front, J Sainsbury (LON:SBRY) is one of the blue-chips scheduled to update investors on their recent performance.

IG’s opening calls point to a 3.57-percent fall for the Footsie this morning, after initial US exit polls showed that Republican Donald Trump had snatched victories in key US states. The initial results have sent the dollar tumbling, while Dow futures briefly dropped more than 800 points. Asian shares have also fallen deep into the red.
“Markets are reacting as though the four horsemen of the apocalypse just rode out of Trump Tower,” Sean Callow, a forex strategist at Westpac in Sydney, told Reuters. “Or at least three of them – it might be four when the prospect of a clean sweep of Congress sinks in.”

CNBC meanwhile quoted Strategas head of policy research Dan Clifton, as commenting that “what bothers the markets are uncertainties about a new president, his issues of trade, and people are worried about how other world actors will react to a Trump presidency”.
Reuters notes that Democrat Hillary Clinton can still reach 270 electoral votes, but she would have to sweep the remaining battleground states including Pennsylvania, Michigan and pull off an upset win in Arizona.

The Footsie added 36.23 points to close 0.53 percent higher at 6,843.13 yesterday amid hopes for a Clinton victory. Associated British Foods (LON:ABF), which posted an upbeat full-year results statement, was the biggest blue-chip riser in percentage terms, adding 5.79 percent to 2,633.00p.
In macroeconomic releases, the UK’s trade balance for September is due out at 09:30 GMT. IG reports that the nation’s trade deficit is expected to have shrunk to £1.7 billion, from £4.7 billion in August.
Today’s corporate releases include Sainsbury’s results, with investors also eyeing an update on the grocer’s pension deficit. Other blue-chips reporting today include Burberry (LON:BRBY), SSE (LON:SSE) and Experian (LON:EXPN).

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