FTSE 100 preview: Muted start ahead as investors digest ECB President comments
The UK benchmark index looks set to open little changed this morning, with investors digesting comments from European Central Bank (ECB) President Mario Draghi and following lacklustre leads from the US and Asia. On the corporate front, Vodafone (LON:VOD) is scheduled to update investors on its quarterly performance.
IG’s opening calls suggest that the Footsie will start the session 0.03 percent higher at 7,490 points. The blue-chip index looks poised to a mildly positive start following comments by ECB President Mario Draghi that tapering will be discussed in the autumn. Oil meanwhile has been little changed ahead of an OPEC meeting next week.
“Draghi’s speech was essentially dovish, emphasising a ‘very substantial degree of accommodation’ and reaffirming the commitment to quantitative easing,” Mitsubishi analyst Jonathan Butler said, as quoted by Reuters.
In the US, stocks closed mixed last night with investors continuing to focus on the ongoing earnings season.
“Every day it seems like one or two components that drag the Dow, and the S&P and Nasdaq hit record highs because on balance, earnings season’s going well,” said Art Hogan, chief market strategist at Wunderlich Securities, as quoted by CNBC. “It feels like you’ve got a real focused shift from the macro to the micro.” Asian shares meanwhile have been subdued this morning.
The UK benchmark index gained ground yesterday, finding support in a weaker pound, with sterling retreating in response to lack of progress in the ongoing Brexit negotiations. The ECB meanwhile left its interest rates and monthly bond purchases unchanged. The FTSE 100 added 56.96 percent to close 0.77 percent higher at 7,487.87.
There are no major macroeconomic releases out of Europe to provide direction this morning. In corporate releases, Vodafone will unveil its first-quarter results this morning after posting a hefty full-year loss in May, on the back of a net of tax impairment of €3.7 billion on its Indian business.
