FTSE 100 preview: Index seen lower ahead of Fed meeting
Britain’s blue-chip index looks set to start the week on the back foot, in the wake of the nation’s general election, and amid investor caution ahead of a Federal Reserve meeting starting tomorrow. BP (LON:BP) will be in focus today amid reports that it is eyeing its first deal in Nigeria.
CNBC reports that the FTSE 100 is seen opening 33 points lower at 7,489, with investors staying on the sidelines ahead of the Fed’s two-day meeting starting tomorrow, with the US central bank largely expected to hike rates.
“The equity markets and the dollar have mostly priced in the Fed signalling three rate hikes in 2017,” Junichi Ishikawa, senior forex strategist at IG Securities commented, as quoted by Reuters. “But if the Fed hints at more than three hikes, that could trigger a sell-off in equities that many are bracing for.”
In the, US stocks closed mixed on Friday, pressured by a drop in tech shares, while Asia has followed suit this morning.
At home, Prime Minister Theresa May has moved to strike a deal with Northern Ireland’s Democratic Unionists after her Conservative Party lost its parliamentary majority in last week’s election.
The Footsie rallied on Friday as investors digested the election results, and the prospects for a hung parliament fuelling a selloff in the pound, boosting blue-chips with international exposure. The benchmark index added 77.33 points to end the session 1.04 percent higher at 7,527.33.
There are no macroeconomic announcements out of Europe to provide direction this morning and no blue-chips are scheduled to update investors on their performance. In company news, The Times reports that BP is in talks with an AIM-listed oil explorer which could see it win its first toehold in Nigeria.