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FTSE 100 preview: Index set for a slide after US selloff

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The FTSE 100 looks poised to open lower this morning, following a sharp decline on the other side of the Atlantic, prompted by economic slowdown concerns. Shire (LON:SHP) will be in focus today as shareholders in Takeda Pharmaceutical gave their approval for the Japan’s group acquisition of the London-listed rare disease specialist.

Index seen in the red

Reuters reports that the Footsie is seen opening 72 points lower at 6,951 this morning, according to financial bookmakers. The blue-chip index is expected to take cues from the US, where the major indices plunged by more than three percent. CNBC reports that investors worried about a bond-market phenomenon signalling a possible economic slowdown, with the yield on the three-year Treasury note surpassing its five-year counterpart on Monday.

“No good deed goes unpunished,” said Art Hogan, chief market strategist at B. Riley FBR. , as quoted by CNBC. “As we get headwinds from trade worries fading, you get an inverted yield curve and another brick added to the market's wall of worry.”

The FTSE 100 retreated in the previous session, shedding 39.65 points to close 0.56 percent lower at 7,022.76, with the post trade truce rally losing steam. Asian shares have tracked the US lower this morning.

Wednesday’s agenda

Today’s macroeconomic statements include the UK’s services purchasing managers’ index (PMI), schedule to be released at 09:30 GMT. IG reports that activity is expected to have increased, with the index having climbed to 54.1, from 52.2. In the US, the ADP employment report is out at 13:15 GMT, to be followed by the nation’s non-manufacturing PMI at 15:00 GMT.

In corporate news, Reuters reports that Takeda’s investors have backed the group’s $59-billion acquisition of Shire, with nearly 90 percent of shareholders voting to approve the deal.

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