FTSE 100 preview: Index to open lower after Fed meeting

on May 3, 2018

The UK benchmark index looks set to open in the red this morning, giving up some of the previous sessions’ gains, with investors digesting the latest Federal Reserve statement. On the corporate front, Unilever (LON:ULVR) will be in focus today following its annual general meeting yesterday, which saw more than a third of the group’s shareholders oppose its pay policy.

Footsie to open lower

IG’s opening calls suggest that the Footsie will start the session 0.28 percent in the red at 7,522 points. The index is likely to take cues from the US where shares fell last night following the Federal Reserve’s latest policy statement.

“The statement carried only modest changes in wording, but they were meaningful nonetheless, highlighting that the Fed is optimistic on the outlook and intent on continuing to raise rates at a gradual pace,” said Westpac analyst Elliot Clarke, as quoted by Reuters. Asian shares meanwhile have tracked the US lower this morning.

In the UK, the FTSE 100 closed marginally higher yesterday, adding 22.84 points to end the session 0.30 percent higher at 7,543.20, with investors continuing to focus on the ongoing earnings season.

Today’s calendar

Thursday’s macroeconomic releases include the UK services purchasing managers’ index (PMI) for April, due out at 09:30 BST. IG reports that the index is expected to have climbed to 54.1, from 51.7. The eurozone flash consumer price index for April is scheduled to be announced at 10:00 BST, while on the other side of the Atlantic, the US trade balance for March is out at 13:30 BST, to be followed by the ISM non-manufacturing PMI for April at 15:00 BST.

Blue-chips reporting today include Glencore (LON:GLEN) and Smith & Nephew (LON:SN). FTSE 100 companies, whose shares will be trading without the attraction of their latest dividend in today’s session, include G4S (LON:GFS), Kingfisher (LON:KGF), London Stock Exchange (LON:LSE), Mondi (LON:MNDI) and Unilever (LON:ULVR). Reuters’ calculations suggest that ex-divs will knock 4.73 points off the benchmark index.