FTSE 100 preview: Lacklustre start ahead as oil comes under pressure

on Jun 6, 2017

The UK benchmark index looks set to open little changed this morning, amid uncertainty ahead of the nation’s general election on Thursday, and with oil prices coming under pressure after yesterday’s brief recovery. Royal Bank of Scotland Group (LON:RBS) will remain in focus today amid criticism of its plan to boost small business lending.

IG’s opening calls suggest that the FTSE 100 will start the day 0.04 percent higher at 7,528 points. Sentiment is likely to be subdued today as oil fell back after Saudi Arabia and several other Arab states severed ties with Qatar.
“A potential risk to monitor might be that Qatar will view this as being provided with less encouragement to comply with the agreed (OPEC) production quota,” said Jameel Ahmad of futures brokerage FXTM, as quoted by Reuters. In the US, stocks closed lower last night, despite holding near record levels, while in in Asia, shares have been mixed this morning.

“It has been a quiet overnight session ahead of what could be a stormy Thursday, with the European Central Bank, UK election and (James) Comey’s testimony all occurring on the same day,” National Australia Bank Currency Strategist Rodrigo Catril suggested, as quoted by CNBC.
At home, the FTSE 100 index lost 21.87 points to end the session 0.29 percent lower at 7,525.76, amid uncertainty ahead of this week’s election and with the weekend’s attacks in London pressuring travel-related shares.
There are no major macroeconomic releases out of Europe to provide direction this morning and no blue-chip companies are scheduled to update investors on their performance. In other news, the Financial Times reports that a group of new UK banks has warned Brussels that RBS’ plan to boost competition in the small business lending market is flawed.

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