FTSE 100 preview: Ex-divs and geopolitical tensions to weigh on index
The UK benchmark index looks set to start the session in the red, pressured by a string of blue-chips whose shares will be trading without the attraction of their latest dividend. Geopolitical tensions are also likely to weigh on the FTSE 100.
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IG’s opening calls suggest that the Footsie will start the session 41 points lower at 7,458 points. Global sentiment has remained subdued amid tension between the US and North Korea, which pressured equities on the other side of the Atlantic last night. President Donald trump warned North Korea this week that it would face ‘fire and fury’ if it delivers more threats against the US, while Pyongyang said that it was ‘carefully examining’ the idea of a missile strike on Guam.
“A North Korean military strike would unambiguously constitute an act of war against America. I therefore have full confidence that Kim Jong-un will not take such a drastic step,” said Jeremy Klein, chief market strategist at FBN Securities, as quoted by CNBC. “Hence, the volatility that arose since yesterday afternoon should soon subside.” Asian shares meanwhile have remained subdued this morning.
At home, the Footsie lost ground yesterday, shedding 44.67 points to end the session 0.59 percent lower at 7,498.06, with investors shunning equities and flocking to safe-haven assets in the face of geopolitical worries.
Today’s macroeconomic releases include the UK trade balance for June, due out at 09:30 BST. Blue-chips reporting today include Glenore (LON:GLEN) and Prudential (LON:PRU). FTSE 100 companies, whose shares are going ex-dividend today, include Anglo American (LON:AAL), AstraZeneca (LON:AZN), Barclays (LON:BARC), BP (LON:BP), BT Group (LON:BT.A), Diageo (LON:DGE), Direct Line (LON:DLG), Fresnillo (LON:FRES), GKN (LON:GKN), GlaxoSmithKline (LON:GSK), Informa (LON:INF), Lloyds Banking Group (LON:LLOY), Royal Dutch Shell (LON:RDSA), Rio Tinto (LON:RIO) and Rentokil (LON:RTO). Reuters’ calculations suggest that ex-divs will knock 41.3 points off the Footsie.