FTSE 100 preview: Index looking up as UK political drama continues

FTSE 100 preview: Index looking up as UK political drama continues
Written by:
Tsveta van Son
4th September 2019
Updated: 11th March 2020

The FTSE 100 looks set to start Wednesday’s trading on the front foot, with investors digesting the latest political developments in the UK. Royal Bank  of Scotland Group (LON:RBS) will be in focus on the corporate front today as it updated investors on charges related to the payment protection insurance (PPI) scandal.

FTSE 100 seen higher

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IG’s opening calls suggest that the Footsie will start trading 0.34 percent higher at 7,293 points. Sentiment is likely to be upbeat today after a cross-party alliance in the UK parliament defeated Prime Minister Boris Johnson who said he would push for a new general election.

In the US, shares fell last night as investors returned from a long weekend to the reality of new US-China tariffs.

It’s “every country for themselves. The month of September begins with global uncertainty perhaps at its recent highs,” said Gregory Faranello, head of US rates at AmeriVet Securities, as quoted by CNBC. “September will very likely set the tone for the remainder of this year and perhaps then some.” Asian shares meanwhile have advanced this morning, benefitting from upbeat data out of China.

In the UK, the FTSE 100 fell marginally in the previous session, shedding 13.75 points to end trading 0.19 percent lower at 7,268.19 points, as investors digested the latest Brexit developments. In individual blue-chip movers, Ferguson (LON:FERG) rose more than two percent, benefitting from a positive reaction to its plans to demerge its Wolseley UK business.

Wednesday’s calendar

Today’s macroeconomic agenda includes the UK’s services purchasing managers’ index for August, due out at 09:30 BST and IG reports that the index is expected to have fallen to 51.1, from 51.4. On the other side of the Atlantic, the US trade balance is scheduled to be released at 13:30 BST. In FTSE 100 corporate releases, blue-chip housebuilder Barratt Developments (LON:BDEV) is reporting today.

In other FTSE 100 company news, part government-owned RBS has booked an extra charge relating to the PPI scandal after logging more-than-expected claims last month.

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