FTSE 100 preview: Index seen lower after Fed Chair comments

The FTSE 100 looks set to open lower this morning, with investors mulling over comments by the US Federal Reserve Chair and ahead of the Bank of England (BoE) rate decision. There is also a lot happening on the corporate front as well, including results by Lloyds Banking Group (LON:LLOY) and Barclays’ (LON:BARC) highly-awaited annual general meeting (AGM).

FTSE 100 seen lower

IG’s opening calls suggest that the Footsie will start trading 0.41 percent lower at 7,355 points. The blue-chip index is likely to take cues from the US where shares fell last night as Fed Chair Jerome Powell dashed hopes for a rate cut, commenting in a news conference that low inflationary pressures may only be ‘transitory’.

“The market was pricing in this rate cut. They want a rate cut and this was basically Powell saying, ‘sorry but we’re not,’” said Peter Boockvar, chief investment officer at the Bleakley Advisory Group, as quoted by CNBC. Asian shares meanwhile have been mixed this morning.

At home, the Footsie shed 32.96 points to close 0.44 percent lower at 7,385.26 yesterday, as investors focused on corporate news amid the ongoing earnings season. Sainsbury’s (LON:SBRY) was one of the session’s biggest risers as the market welcomed its full-year results.

Thursday’s agenda

Today’s macroeconomic statements the UK construction purchasing managers’ index for April, due out at 09:30 BST and IG reports that the index is expected to have climbed from 49.7 to 49.8, while still remaining in contraction territory.

The BoE rate decision is scheduled to be announced at 12:00 BST. Almost no economists polled by Reuters expect the bank to hike rates from 0.75 percent until Britain has left the EU.

Blue-chips reporting today include Lloyds, Royal Dutch Shell (LON:RDSA), Reckitt Benckiser (LON:RB), Schroders (LON:SDR), Coca-Cola HBC (LON:CCH) and Smith & Nephew (LON:SN). Barclays meanwhile will hold its AGM amid pressure from activist investor Edward Bramson.

FTSE 100 stocks, whose shares will be trading without the attraction of their latest dividend, include London Stock Exchange (LON:LSE), RELX (LON:REL), Rightmove (LON:RMV) and Unilever (LON:ULVR). Reuters’ calculations suggest that ex-divs will knock 4.45 points off the Footsie.