FTSE 100 preview: Index looking up after Friday’s selloff
The UK benchmark index looks set to open higher this morning, starting the week on the front foot, and recouping some of the losses posted during Friday’s hefty selloff. Royal Bank of Scotland Group (LON:RBS) will be in focus today amid reports that it is set to reach a settlement with the US Department of Justice over mis-sold mortgage-backed securities within weeks.
Upbeat start on the cards
IG’s opening calls suggest that the FTSE 100 will open 0.39 percent higher at 7,098 points. The blue-chip index is likely to take cues from the US, where shares recovered on Friday, led higher by the healthcare sector, despite posting falls for the week.
“When there’s an opportunity to buy on the dip, people are taking it,” said Phil Blancato, CEO of Ladenburg Thalmann Asset Management, as quoted by CNBC. “Economically, you’re healthy […] and earnings continue to be strong.” Asian shares meanwhile have been subdued this morning, partly pressured by political uncertainty in Italy following the country’s general election yesterday.
“The messy Italian election result adds a bit to the nervousness to global equity markets at present,” Shane Oliver, Sydney-based chief economist at AMP, told Reuters, adding that the election ran “the risk of making Italy’s public finances worse than they already are with no progress in addressing Italy’s long-term competitiveness problems”.
In the UK, the FTSE 100 tumbled on Friday, shedding 105.74 points to end the session 1.47 percent in the red at 7,069.90, pressured by trade war fears.
Today’s macroeconomic updates include the UK’s services purchasing managers’ index (PMI) for February and IG reports that the index is expected to have inched higher to 53.4 from 53. In the US, the nation’s non-manufacturing PMI for February is scheduled to be released at 15:00 GMT. In company developments, Sky News reported on Friday that RBS was edging towards a huge US mis-selling fine set to pave the way for the long-awaited privatisation of taxpayers’ majority stake in the company.