FTSE 100 preview: Index seen steady as investors await Jackson Hole news

on Aug 24, 2017

The UK benchmark index looks set to open marginally higher this morning, shrugging off a downbeat US lead, with investors awaiting news from the central bankers meeting in Jackson Hole, Wyoming. Royal Mail Group (LON:RMG) will be in focus today amid reports of a legal challenge.

IG’s opening calls suggest that the FTSE 100 will start the day three points higher at 7,386. The index is seen steady as European Central Bank President Mario Draghi prepares to address other central bankers in Jackson Hole tomorrow.

US stocks fell last night, after President Donald Trump said that he would be willing to let the government shut down to build the border wall with Mexico. He further expressed doubts whether the US can reach a deal to renegotiate the the North Atlantic Free Trade Agreement, adding that the government will ‘probably’ terminate it.

“With so many uncertainties weighing on US equities due to their overvalued levels, these two threats are ones investors could have done without,” Komal Sri-Kumar, president of Sri-Kumar Global Strategies, said in an email to CNBC. Asian shares, however, have firmed up this morning, despite the downbeat US lead.

The FTSE 100 closed little changed yesterday, adding 0.91 points to end the session 0.01 percent higher at 7,382.65, finding support in ongoing demand for mining shares. Provident Financial (LON:PFG), whose shares tumbled some 66 percent earlier in the week, recovered some ground, adding 12.13 percent to close at 661.00p.

Today’s macroeconomic releases include the second estimate of the UK’s second-quarter gross domestic product at 09:30 BST, and IG reports that no change to the previous estimate of 0.3-percent quarter-on-quarter growth is expected. On the other side of the Atlantic, US existing home sales for July are due out at 15:00 BST.

In company news, City A.M. reports that Royal Mail is part of a swelling group of Britain’s best-known companies in a legal battle against truckmakers in a £4-billion price-fixing row.

Blue-chips whose shares will be trading without the attraction of their latest dividend in today’s session include Carnival (LON:CCL), London Stock Exchange (LON:LSE), Mondi (LON:MNDI), Paddy Power Betfair (LON:PPB) and Prudential (LON:PRU). Reuters’ calculations suggest that ex-divs will take 2.32 points off the Footsie.