FTSE 100 preview: Index looking up after US government deal

on Jan 23, 2018

The UK benchmark index looks set to open higher this morning, taking cues from the US where shares rose on the back of a deal to end the government shutdown. In company news, easyJet (LON:EZJ) is scheduled to post results this morning.

Index looking up

IG’s opening calls suggest that the Footsie will open 0.32 percent higher at 7,740 points. Sentiment is likely to be upbeat today after US stocks ended the previous session higher as lawmakers reached a deal which would resume government operations.

"Anyone with capital markets experience knows that US government shutdowns are largely meaningless in the context of financial asset values," said Nicholas Colas, co-founder of DataTrek Research, in a note, as quoted by CNBC. "Getting sucked into a series of seemingly ominous headlines that smarter players already understand is a typical rookie trading mistake." Asian shares meanwhile have tracked the US higher this morning, with investors cheering the deal.

At home, the Footsie lost 15.35 points to end the session 0.20 percent lower at 7,715.44, with a rise in sterling pressuring the blue-chip index. Sentiment was also impacted by the government shutdown on the other side of the Atlantic. Rentokill (LON:RTO) was the biggest blue-chip faller in percetage terms, shedding 2.97 percent. 

Tuesday’s agenda

Today’s macroeconomic releases include the German economic sentiment ZEW index for January, due out at 10:00 GMT, to be followed by the flash eurozone consumer index at 15:00 GMT. On the corporate front, easyJet is scheduled to update investors on its first-quarter performance. British Airways parent International Consolidated Airlines Group (LON:IAG) meanwhile has reportedly lost the battle for Austrian carrier Niki, with Reuters reporting that former  Formula One champion Niki Lauda is set to acquire the airline.