FTSE 100 preview: Index looking up amid central bank news

FTSE 100 preview: Index looking up amid central bank news

The FTSE 100 index looks set to open higher this morning, with investors digesting comments by the US Federal Reserve and awaiting a Bank of England policy meeting at home. GlaxoSmithKline (LON:GSK) will be in focus on the corporate front today, amid reports that it is looking to sell some consumer health brands.

FTSE 100 seen higher

Reuters reports that the Footsie is seen opening 24 points higher at 7,427, according to financial bookmakers. In the US, shares rose last night as the nation’s central bank hinted at a possible rate cut.

“This was our baseline scenario. The Fed opened the door for cuts. They maintained some independence from some of the outreach for lower rates coming out of the administration,” said Gregory Faranello, head of US rates at AmeriVet Securities, as quoted by CNBC. “Short term, it’s going to depend on the data. If the data warrants a cut, the chairman is saying the Fed is prepared to adjust policy.” Asian shares have tracked the US higher this morning.

In the UK, the Footsie closed in the red giving up 39.50 points to end trading 0.53 percent lower at 7,403.54 as investors awaited the Fed rate decision.

Thursday’s agenda

Today’s macroeconomic releases include UK sales data, due out at 09:30 BST and IG reports that sales are expected to have climbed 4.6 percent year-on-year. The BoE rate decision will be announced at 12:00 BST and economists polled by Reuters think there will be a unanimous vote to hold rates at 0.75 percent. In the afternoon, the US Philadelphia Fed index for June will be unveiled at 13:30 BST, to be followed by the flash eurozone consumer confidence index for June at 15:00 BST.

In Footsie company news, Reuters reports that GSK has kicked off the sale of some consumer health brands as it seeks to raise about £1 billion before pressing ahead with a spinoff of its consumer healthcare business.

Blue-chips, whose shares will be trading without the attraction of their latest dividend in today’s session, include Compass Group (LON:CPG), Land Securities (LON:LAND) and United Utilities (LON:UU). Reuters’ calculations suggest that ex-divs will knock 1.83 points off the FTSE 100.

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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