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FTSE 100 preview: Ex-divs and US-China tensions to pressure Footsie

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The UK benchmark index looks set to start today’s session in negative territory, pressured by the latest US-China news, as well as by heavyweights going ex-dividend. In FTSE 100 corporate releases, Burberry (LON:BRBY) is due to update investors on its full-year performance this morning.

Footsie seen lower

IG’s opening calls suggest that Britain’s blue-chip index will start trading 0.51 percent in the red at 7,260 points. The FTSE 100 is likely to take cues from Asia where shares have come under pressure as the US hit China’s Huawei with severe sanctions, adding to tensions between Washington and Beijing. In the US, shares rose last night following news that President Donald Trump was planning to delay the implementation of auto tariffs.

“US markets were buoyed on President Trump possibly pulling back on auto tariffs on both Europe and Japan, but really Asian markets have latched on the fact that he’s not letting up in the trade war against China,” Nick Twidale, chief operating officer at Rakuten Securities Australia, told Reuters.

In the UK, the FTSE 100 rose in the previous session, building on Tuesday’s rally, gaining 55.35 points to end trading 0.76 percent higher at 7,296.95 as investors digested a string of corporate releases.

Thursday’s agenda

There are no major macroeconomic releases out of Europe to provide further market guidance this morning. In the US, initial jobless claims for the week ending May 11, housing starts and building permits for April, as well as  the Philadelphia Fed index for May are all due out at 13:30 BST.

On the corporate front, investors will eye Burberry’s full-year results, along with an update from National Grid (LON:NG). Lloyds (LON:LLOY) meanwhile is scheduled to hold its annual general meeting amid backlash over chief executive António Horta-Osório’s pension arrangements.

Blue-chips, whose shares will be trading without the attraction of their latest dividend today, include GlaxoSmithKline (LON:GSK), HSBC (LON:HSBA), Intertek (LON:ITRK), Royal Dutch Shell (LON:RDSA, LON:RDSB) and Tesco (LON:TSCO). Reuters’ calculations suggest that ex-divs will knock 23.6 percent off the FTSE 100.

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