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FTSE 100 preview: Footsie to extend losses amid US-China worries

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The UK benchmark index looks set to open lower this morning, extending the previous session’s hefty losses, amid lingering concerns over the US-China trade relations. In FTSE 100 company news, ITV (LON:ITV) will post a trading update as it holds its annual general meeting later today.

FTSE 100 to open lower

IG’s opening calls suggest that the Footsie will start trading 0.12 percent lower at 7,252 points. The blue-chip index is likely to take cues from the US where shares fell last night as a trade official signalled that higher tariffs on Chinese goods were coming this week.

Robert Lighthizer’s comments “further increased the likelihood of a tariff step up,” Keith Parker, a strategist at UBS, said in a note, as quoted by CNBC.

“We still see a trade war as low probability given the next tranche of tariffs would hit US consumer goods, but nevertheless it would have a big negative impact,” he pointed out. Asian shares have tracked the US lower this morning.

In the UK, the FTSE 100 tumbled yesterday, giving up 120.17 points to close 1.63 percent lower at 7,260.47, pressured by the US-China trade concerns as well as a move by the European Commission to lower its quarterly growth forecast for the eurozone.

Wednesday’s agenda

There are no major macroeconomic releases out of Europe to guide the market this morning. In the US, the EIA crude inventories data for last week will be announced at 15:30 BST. On the corporate front, investors will eye ITV’s report after the broadcaster warned earlier this year that economic and political uncertainty continued to impact the demand for advertising. Other Footsie companies reporting today include Imperial Brands (LON:IMB) and Direct Line Group (LON:DLG). BHP (LON:BHP) meanwhile has said that it would defend a claim in the UK over the Samarco dam failure in 2015.

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