FTSE 100 preview: Index set to extend French election rally

on Apr 25, 2017

The UK benchmark index looks set to open higher this morning, building on the previous session’s gain, with sentiment remaining upbeat in the wake of the first round of France’s election over the weekend which saw centrist Emmanuel Macron come on top. The earnings season meanwhile will continue with Costa Coffee and Premier Inn owner Whitbread (LON:WTB).

IG’s opening calls suggest that the Footsie will kick off the session 0.29 percent higher at 7,286 points. US equities soared last night, with investors welcoming the results of the first round of France’s presidential election.
“The market really seemed to like” the election outcome, said Randy Warren, chief investment officer at Warren Financial, as quoted by CNBC. “It really surprised me because the other candidate is Le Pen and she’s the sleeper candidate.” Asian shares have tracked the US higher this morning.

The Footsie rallied yesterday, propped up by French election relief. The index added 150.13 points to end the session 2.11 percent higher at 7,264.68. Centrica (LON:CNA), however, bucked the trend as the Conservative Party signalled that it would cap domestic prices if it retains power in an election in June. Shares in the British Gas owner ended the session 3.51 percent in the red at 200.40p.
“The clear reason for this rally is that European markets have been held back by political risk over the last 12 months,” Tim Stevenson, European equities fund manager at Henderson, told Reuters.
There are no major macroeconomic releases out of Europe to provide direction this morning. In the afternoon, the US consumer confidence index for April and new home sales for March are scheduled to be released at 15:00 BST. On the corporate front, Whitbread is set to post its preliminary results this morning.

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