FTSE 100 preview: Index seen lower amid geopolitical worries

on Sep 16, 2019
Updated: Sep 17, 2019
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The FTSE 100 looks set to open lower this morning, pressured by geopolitical worries following attacks on oil facilities in Saudi Arabia. On the corporate front, Direct Line Group (LON:DLG) has appointed a new finance chief.

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FTSE 100 seen lower

IG’s opening calls suggest that the Footsie will start trading 0.30 percent lower at 7,345 points. Sentiment is likely to be subdued this morning, despite a rise in crude prices, with investors digesting weekend attacks on facilities in Saudi Arabia.

“The bigger issue is what premium markets will build in to reflect the risk of further attacks,” said Kerry Craig, Global Market Strategist, J.P. Morgan Asset Management, as quoted by Reuters. “In the very near-term, we may also see a pick-up in safe-havens.”

CNBC meanwhile reports US stock futures have retreated this morning, pressured by fears that the rise in oil could slow down global economic growth.

This “is the largest supply shock ever. The world is dependent on strategic reserves right now and you will see SPR draws,” Bob Ryan, chief commodities and energy strategist at BCA Research, commented in a note, as quoted by CNBC. “The market could tighten significantly if the outage is indeed weeks and not days.”

In the UK, the FTSE 100 rose in the previous session, gaining 22.79 points to end trading 0.31 percent higher at 7,367.46, with optimism over Brexit lifting the pound and fuelling demand stocks with domestic exposure, which helped offset a decline in blue-chips with international operations.

Monday’s agenda

There are no major macroeconomic releases out of Europe to guide the market further this morning. In the US, the New York Empire State manufacturing index for September will be announced at 13:30 BST.

There are no FTSE 100 companies scheduled to update investors on their performance this morning. In other corporate news, Direct Line has appointed Royal London Group executive Tim Harris as chief financial officer.

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