FTSE 100 preview: Index to open lower after US tax cut report

on Oct 31, 2017
Updated: Mar 11, 2020

The UK benchmark index looks set to start the last day of October marginally lower this morning, following lacklustre leads from the US and Asia. On the corporate front, BP (LON:BP) is scheduled to update investors on its third-quarter performance.

Downbeat start ahead

IG’s opening calls suggest that the FTSE 100 will start the session 0.08 percent lower at 7,482 points. The blue-chip index is likely to take cues from the US, where shares dropped after a Bloomberg report suggested that the House was considering a plan to gradually lower the corporate tax rate.

Dave Lutz, head of ETF trading at JonesTrading, told CNBC that the report was “absolutely hitting the market”. Asian shares meanwhile have been mixed this morning with investors digesting the US tax report news.

“Expectations were for the corporate tax to be cut in one go,” Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management, told Reuters, adding, however, that even if the cut was “implemented gradually, it still is a reduction and that won’t be bad news in the long term”.

At home, the Footsie shed 17.22 points to end the session at 7,487.81, pressured by a rise in the pound amid expectations for a rate hike by the Bank of England later in the week.

Today’s calendar

Today’s macroeconomic releases include the eurozone’s inflation for October, third-quarter gross domestic product and unemployment for September, all due out at 11:00 BST. In the US, the Federal Reserve is due to kick off its two-day policy meeting later today. In company releases, BP is expected to post a rise in third-quarter profits, having benefitted from stronger crude prices. Advertising giant WPP (LON:WPP) is also scheduled to update investors on its recent performance.