FTSE 100 preview: Downbeat start ahead as investors await ECB decision

on Jan 25, 2018

The UK benchmark index looks set to open marginally lower this morning, extending the previous session’s hefty losses, with investors awaiting the European Central Bank’s (ECB) policy decision later in the day. In company news, a hedge fund has predicted a bid from a transatlantic rival for the London Stock Exchange Group (LON:LSE).

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Muted start ahead

IG’s opening calls suggest that the FTSE 100 will start the session 0.09 percent in the red at 7,636 points. Investors are likely to stay on the sidelines ahead of the ECB decision later.

“There’s no doubt in our minds that [ECB President Mario] Draghi will try to jawbone the currency by expressing his discontent with its rapid rise, but that may not be enough to reverse the uptrend in the euro,” BK Asset Management Managing Director of FX Strategy Kathy Lien wrote in a note, as quoted by CNBC.

In the US, shares closed mixed last night following a volatile session. Asian stocks meanwhile have lost ground this morning.

In the UK, the FTSE 100 shed 88.40 points to close 1.14 percent in the red at 7,643.43, pressured by a rise in sterling on the back of strong jobs data.  

Thursday’s calendar

Today’s macroeconomic releases include the German IFO business climate index for January, scheduled to be released at 09:00 GMT. The ECB rate decision is scheduled for 12:45 GMT, to be followed by the bank’s traditional press conference at 13:30 GMT. In the US, the nation’s new home sales for December are scheduled to be announced at 15:00 GMT.

On the corporate front, investors will be eyeing results by Sky (LON:SKY), Diageo (LON:DGE) and St James’s Place (LON:STJ). There are no blue-chip companies scheduled to trade without the attraction of their latest dividend in today’s session. In other developments, Sky News has reported that Sir Christopher Hohn, who runs The Children's Investment Fund Management, has stoked expectations of a £15-billion takeover bid for LSE from a transatlantic rival.