FTSE 100 preview: Downbeat start ahead of BoE rate decision

The UK benchmark index looks set to open lower this morning, pressured by a downbeat lead from the US and ahead of a rate decision by the Bank of England. GKN (LON:GKN) will be in focus today with the government showing interest in Melrose Industries’ hostile bid for the aerospace and automotive group.  

Index seen subdued

IG’s opening calls suggest that the FTSE 100 will start the session 0.64 percent lower at 7,233 points. Sentiment is likely to be subdued today amid investor caution ahead of the BoE rate decision and following a downbeat handover from the US where stocks closed lower last night, with interest rates rising again.

“That’s probably the biggest thing happening here,” said Dave Lutz, head of ETF trading at JonesTrading, as quoted by CNBC, referring to the rise in yields. Asian shares meanwhile have advanced this morning, despite the negative lead from the US.

At home, the Footsie rallied yesterday, adding 138.02 points to end the session 1.93 percent higher at 7,279.42, recovering some of the losses posted in the previous sessions.

Thursday’s agenda

Today’s main macroeconomic event is the BoE rate decision, due out alongside the bank’s inflation report, at 12:00 GMT. On the corporate front, Smith & Nephew (LON:SN) and Compass Group (LON:CPG) are scheduled to update investors on their performance.

The Sage Group (LON:SGE) is the only blue-chip company, whose shares will be trading without the attraction of their latest dividend in today’s session. Reuters’ calculations suggest that the adjustment will take 0.4 points off the FTSE 100. In other news, The Times reports that Theresa May had promised that the government would “act in the UK national interest” if it was warranted amid Melrose Industries’ £7.2-billion hostile takeover bid for GKN.