FTSE 100 preview: Index seen higher after Fed minutes

FTSE 100 preview: Index seen higher after Fed minutes
Written by:
Alice Young
25th May 2017

The UK benchmark index looks set to open higher this morning, following the Federal Reserve’s minutes released last night, and with investors eyeing an OPEC meeting in Vienna. BT Group (LON:BT.A) will be in focus amid reports that it is plotting joining the race for the free-to-air rights to English cricket.

IG’s opening calls suggest that the FTSE 100 will start the session 0.27 percent higher at 7,535 points. The blue-chip index is likely to take cues from the US where stocks rose last night, as investors digested the minutes from the Fed’s latest policy meeting. The central bank signalled that it was planning to scale back its massive $4.5 trillion balance sheet.
“The Fed provided more clarity here,” said Matt Toms, chief investment officer of fixed income at Voya Investment Management, as quoted by CNBC. “They’re implying the ability to modulate their balance-sheet reduction plan. It shows the Fed is not on auto-pilot and that they can adopt as needed.” Asian shares have tracked the US higher this morning.

The Footsie rose yesterday, adding 29.61 points to end the session 0.40 percent higher at 7,514.90, helped by a rise in Marks & Spencer (LOMMKS) as investors responded positively to the retailer’s full-year results.
Today’s macroeconomic calendar includes the second estimate for the UK’s first-quarter gross domestic product, due out at 09:30 BST. IG reports that year-on-year growth is expected to be 2.1 percent from 1.9 percent, while quarter-on-quarter growth is forecast to come in at 0.3 percent, unrevised from the first estimate.

United Utilities (LON:UU) meanwhile is scheduled to update investors on its full-year performance. In other news, The Telegraph reports that the BBC is facing fresh competition from BT for the free-to-air rights to English cricket as the telecoms company plots its biggest sporting coup since landing the Champions League.
Footsie companies, whose shares will be trading without the attraction of their latest dividend in today’s session, include Bunzl (LON:BNZL), Carnival (LON:CCL), DCC (LON:DCC), Wm Morrison Supermarkets (LON:MRW), Worldpay (LON:WPG) and Whitbread (LON:WTB). Reuters calculations suggest that ex-divs will knock 1.76 points off the blue-chip index.

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