FTSE 100 preview: Index poised for muted start on Super Thursday

on Feb 2, 2017
Updated: Mar 11, 2020
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The UK benchmark index looks set to open marginally lower this morning, even as the US Federal Reserve gave no hints of accelerating rate hikes, with investors awaiting the Bank of England’s (BOE) rate decision, minutes and Inflation Report. Investors have a lot to look out for on the corporate front today, with a string of blue-chips, including Shell (LON:RDSA), scheduled to update the market on their recent performance.

IG’s opening calls suggest that the Footsie will start the day 0.15 percent in the red at 7,097 points. Sentiment is likely to be subdued, with investors staying on the sidelines ahead of the BOE rate decision. Stocks on the other side of the Atlantic closed mostly higher last night, as the Fed kept rates unchanged.
“The market’s fear was that the Fed could’ve been more hawkish; that didn’t happen,” Matt Toms, chief investment officer of fixed income at Voya Investment Management, told CNBC. Asian stocks meanwhile have been subdued amid worries over Donald Trump’s presidency.

The FTSE 100 index started the second month of the year on a mildly upbeat note, lifted by strong manufacturing data out of China. The index added 8.50 points to end the previous session 0.12 percent higher at 7,107.65.
Today’s macroeconomic releases include the UK construction purchasing managers’ index (PMI) for January, due out at 09:30 GMT. IG reports that the number is forecast to have climbed from 54.2 to 54.6 last month. The BOE interest rate decision and inflation report are scheduled to be released at 12:00 GMT, with no changes expected in policy. Investors, however, will eye the minutes from the meeting, as well as the inflation report.

“Any revision to the economic growth forecast is likely to be upwards, though it’s still likely to be lower than the estimate issued by the central bank before the EU referendum,” said Laith Khalaf, senior analyst Hargreaves Lansdown, as quoted by Sharecast, adding that rising inflation is a given with weaker sterling pushing up import costs.
In corporate releases, Shell is forecast to have grown in the final three months of 2016. Other FTSE 100 companies reporting today include Glencore (LON:GLEN) and Compass Group (LON:CPG).

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