FTSE 100 preview: Winning streak to end amid trade tensions

FTSE 100 preview: Winning streak to end amid trade tensions

The FTSE 100 looks set to start Wednesday’s trading in negative territory, with tensions between the US and China returning to haunt investors. On the corporate front, Royal Dutch Shell (LON:RDSA) is continuing with its divestment programme.

FTSE 100 seen lower

IG’s opening calls suggest that the Footsie will start trading 0.34 percent lower at 7,373 points. In the US, shares fell last night, with investor sentiment turning negative.

“At this point, a failure to break out to new highs would be viewed as negative. The month is only a week and a half old, but we’ve got a head of steam now,” Willie Delwiche, investment strategist at Baird, commented, as quoted by CNBC. “The potential headwind to that is what happens with sentiment. Sentiment turned so negative in May and now, as stock rebound in June, we’re seeing pessimism being replaced with optimism. If it comes in too fast, that can shift from being a tailwind for stocks to a headwind.”

Asian stocks meanwhile have drifted lower this morning as President Donald Trump said that he was holding up a trade deal with China and had no interest in moving ahead unless Beijing agrees to four or five ‘major points’ which he did not specify, as reported by Reuters.

In the UK, the FTSE 100 continued its rise in the previous session, gaining 22.91 points to end trading 0.31 percent higher at 7,398.45, amid optimism over the US-Mexico relations.

Wednesday’s agenda

There are no major macroeconomic releases out of Europe to guide the market further this morning. In the US, the nation’s consumer price index for May will be released at 13:30 BST.

On the corporate front, British American Tobacco (LON:BATS) is scheduled to post a pre-closing trading update this morning. In other news, Shell reported that it had agreed the sale of its Martinez Refinery in California.

By Tsveta van Son
Tsveta van Son is part of Invezz’s journalist team. She has a BA degree in European Studies and a MA degree in Nordic Studies from Sofia University and has also attended the University of Iceland. While she covers a variety of investment news, she is particularly interested in developments in the field of renewable energy.
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