FTSE 100 preview: Index looking up after first round of French elections

on Apr 24, 2017

The UK benchmark index looks set to start the week on the front foot, with investors reacting positively to news that centrist Emmanuel Macron has won the first round of the French election. The rise will come after the FTSE 100 posted its worst week since November.

IG’s opening calls suggest that the Footsie will start the session 0.89 percent higher at 7,178 points. Investor sentiment is likely to be upbeat today amid relief that France has not been left to choose between two radical, anti-EU presidential candidates following the first election round.
“The assumption now is that centrist voters will rally around Macron, denying Le Pen the presidency and hence this will effectively be a pro-establishment, pro-European result which will be positive for risk appetite on Monday morning,” said Richard McGuire, Rabobank’s head of rates strategy in London, as quoted by Reuters.

US stocks closed lower on Friday, amid investor caution ahead of France’s election, while Asian shares have been mixed this morning.
At home, the Footsie ended the previous session little changed, shedding 3.99 points to close 0.06 percent lower at 7,114.55. The index lost nearly three percent for the week, following Prime Minister Theresa May’s call for a snap election in June, which lifted the pound.
In macroeconomic releases, Germany’s IFO index for April is due out at 09:00 BST. On the other side of the Atlantic, the Chicago’s Fed index for March is scheduled to be released at 13:30 BST. Investors have a lot to look forward to on the corporate front this week, with a string of blue-chips scheduled to post their results. Lloyds Banking Group (LON:LLOY) reports on Thursday, while FTSE 100 peers Barclays (LON:BARC) and Royal Bank of Scotland (LON:RBS) are due to update investors on their performance on Friday.

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