FTSE 100 preview: Index looking up amid easing trade tensions

on Mar 27, 2018

The FTSE 100 looks set to open higher this morning, with investors responding positively to easing traded tensions between the US and China. GlaxoSmithKline (LON:GSK) will be in focus today amid reports that it is buying Novartis’ stake in their consumer healthcare venture.

Index to open higher

Reuters reports that according to financial bookmakers, the FTSE 100 is seen opening 78 points higher at 6,966. The blue-chip index is likely to take cues from the US, where shares rose sharply last night, with the US and China moving to ease trade tensions.

Investors “have apparently recognized that a trade war is in no one's best interests and therefore extremely unlikely,” said Jeremy Klein, chief market strategist at FBN Securities, in a note. “Specifically, the President merely wants to fulfil a campaign promise while China will only enact token countermeasures to appease its citizens.” Asian shares meanwhile have tracked the US higher this morning.

“The recent escalation may have simply been a negotiating tactic that will end in a compromise,” analysts at JPMorgan wrote, as quoted by Reuters, cautioning, however, that it was too early to say for sure.

At home, the Footsie shed 33.25 points to end the previous session 0.48 percent lower at 6,888.69, pressured by news of diplomatic tensions with Russia, along with a stronger pound.                        

Tuesday’s calendar

Today’s macroeconomic releases include the eurozone’s business confidence for March, due out at 10:00 BST, to be followed by US consumer confidence data for the same month at 15:00 BST. On the corporate front, United Utilities (LON:UU) are due to post results this morning. In other news, Reuters reports that Novartis will sell its 36.5-percent stake in a consumer healthcare joint venture to GSK for $13.0 billion (£9.14 billion) in cash.