FTSE 100 preview: Index seen steady after Monday selloff

The UK benchmark index looks set to open marginally higher this morning, finding support in stronger oil, following lacklustre leads from the US and Asia ahead of a two-day meeting by the US Federal Reserve due to start later today. The FTSE 100 suffered a selloff yesterday, pressured by a stronger pound and a selloff in airlines.

IG’s opening calls suggest that Britain’s blue-chip index will start the day 18 points higher at 7,396. Reuters reports that oil has extended its recovery on the back of a pledge by leading OPEC producer Saudi Arabia to cut exports next month to help reduce the global crude glut. On the other side of the Atlantic, stocks closed mostly lower last night ahead of this week’s Fed meeting and with investors eyeing earnings releases.

“This is going to be a week where we really focus on earnings,” said Art Hogan, chief market strategist at Wunderlich Securities, as quoted by CNBC. “To the extent where we continue to have these-better-than-expected earnings and sales, the market will continue to move forward.” Asian shares meanwhile have been subdued this morning.
The Footsie finished the previous session deep in the red, shedding 75.18 points to close 1.01 percent lower at 7,377.73.

“(UK equities) are cheap at the moment, the market’s performed well, the currency rates have an advantage on UK (FTSE) 100 companies,” John Moore, trader at Berkeley Capital, commented yesterday, as quoted by Reuters.
Today’s macroeconomic statements include the German IFO business climate index for July, scheduled to be released at 09:00 BST. The US Conference Board consumer confidence index for July is due out at 15:00 BST. On the corporate front, Provident Financial (LON:PFG) will post its interim results this morning.