FTSE 100 preview: Rally to pause after latest China data

FTSE 100 preview: Rally to pause after latest China data
Written by:
Alice Young
10th January 2019

The FTSE 100 looks set to open lower this Thursday, tracking Asia lower, following the latest data out of China which has fuelled slowdown fears. On the corporate front, Tesco (LON:TSCO) will follow Morrisons (LON:MRW) and Sainsbury’s (LON:SBRY) with a trading update.

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FTSE 100 seen lower

Reuters reports that according to financial bookers, the Footsie is seen opening 12 points lower at 6,895. The blue-chip index is likely to take cues from Asia, where shares have been mixed this morning, with lower-than-expected data out of China partly offsetting hopes over Beijing’s trade relations with Washington.

“There is clearly a big slowdown […] (in) the Chinese economy and the measures so far are not enough to revive (it). At best, they could stabilise the situation probably in the second half, and we’re still at the beginning of the first quarter,” David Gaud, chief investment officer of Asia at Pictet Wealth Management, told CNBC’s ‘Street Signs’ this morning. “Whatever they do right now, it's gonna be really tough and the first quarter is going to be challenging.”

In the US, shares rose last night, finding support in the minutes from the Federal Reserve’s latest policy meeting which signalled patience regarding monetary policy.

At home, the Footsie built on Tuesday’s gains, adding 45.03 points to end the session 0.66 percent higher at 6,906.63, finding support in optimism over the US-China trade relations.

Thursday’s releases

Today’s macroeconomic releases include the minutes from the European Central Bank’s latest policy meeting, due out at 12:30 GMT. In the US, the nation’s new home sales for November will be announced at 15:00 GMT.

In company reports, investors will eye an update by FTSE 100 grocer Tesco. Other Footsie companies reporting today include Marks & Spencer (LON:MKS) and Barratt Developments (LON:BDEV).

BHP (LON:BLT) is the only blue-chip company whose shares will be trading without the attraction of their latest dividend today, and Reuters calculations suggest that the effect would knock 6.6 points off the index.

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