FTSE 100 preview: Footsie seen lower despite Fed rate cut

The FTSE 100 looks set to open lower this morning even as the US Federal Reserve moved to trim interest rates. On the corporate front, investors are set to digest Next’s (LON:NXT) latest results.

FTSE 100 seen lower

IG’s opening calls suggest that the FTSE 100 will start trading 0.20 percent lower at 7,299 points. In the US, stocks closed little changed even as the Fed lowered the overnight rate by 25 basis points. The US central bank, however, failed to signal further rate cuts going forward.

“I think the market got into its head it wanted more rate cuts,” said Drew Matus, chief market strategist at MetLife Investment Management, as quoted by CNBC. “Market participants and economists are seeing two different things.” Asian shares have also retreated this  morning.

“The only problem is a 25 basis-point cut was already expected, and the comments and dot-plot forecasts were not as dovish as the market hoped,” Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors, explained, as quoted by Reuters.

The FTSE 100 closed little changed in the previous session, giving up 6.35 points to end trading 0.09 percent lower at 7,314.05 as investors awaited the Fed rate decision.

Thursday’s agenda

Today’s macroeconomic releases include the UK’s retail sales data for August, due out at 09:30 BST and IG reports that sales are expected to have fallen 0.2 percent month-on-month. The Bank of England rate decision will be announced at 12:00 BST.

In FTSE 100 releases, Next is scheduled to update investors on its performance, having hiked its  full-year sales and profit guidance back in July after it saw higher-than-anticipated sales in the second quarter of its financial year. Diageo (LON:DGE) is posting a trading statement, while Johnson Matthey (LON:JMAT) and Land Securities (LON:LAND) are both holding Capital Market Days today.

There are no FTSE 100 companies whose shares will be trading without the attraction of their latest dividend this Thursday.