FTSE 100 preview: Index seen steady despite US tech selloff

on Jun 13, 2017

The UK benchmark index looks set to open higher this morning, with investors shrugging off a downbeat lead from the US. Royal Bank of Scotland Group (LON:RBS) will take the centre stage today amid reports that it is nearing a multibillion-pound fine over mis-sold mortgage-backed securities in the US.

IG’s opening calls suggest that the FTSE 100 will start the day 0.47 percent higher at 7,547 points. In the US, stocks closed lower last night, pressured by a continued selloff in tech shares, with Apple, Amazon, Alphabet, Netflix and Facebook all losing ground.
“There’s an absence of fundamental information to get people more engaged in these names,” said Scott Kessler, technology analyst at CFRA, as quoted by CNBC. “It’s not like earnings season is around the corner.” Asian stocks meanwhile have been steady this morning, despite the downbeat lead from the US.

“The view that some US tech shares are going through inevitable adjustments while retaining a positive outlook is also lessening the impact on the domestic market,” Hitoshi Ishiyama, chief strategist at Sumitomo Mitsui Asset Management, told Reuters.
The FTSE 100 was subdued in the previous session, shedding 15.46 points to close 0.21 percent lower at 7,511.87, with investors continuing to focus on the UK election outcome.

Today’s macroeconomic agenda includes the UK consumer price index for May, due out at 09:30 BST, and IG reports that the index is expected to come in at 0.2 percent month-on-month, and 2.5 percent year-on-year. The German ZEW economic sentiment index for June is scheduled to be released at 10:00 BST, while in the US, the nation’s producer price index for May is due out at 13:30 BST.
On the corporate front, Ashtead (LON:AHT) is scheduled to post its fourth-quarter and year-end results, while Merlin Entertainments (LON:MERL) will update investors on its trading performance. In other news, Sky News reports that RBS is closing in on a $4.5-billion (£3.5-billion) settlement with a US regulator over the mis-selling of toxic mortgage bonds.

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