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FTSE 100 preview: Index to extend gains as US elections rally continues

The FTSE 100 looks set to open higher this morning, building on the previous session’s gains, with investors continuing to digest the outcome of the mid-term elections in the US. On the corporate front, the earnings season will continue with releases from J Sainsbury (LON:SBRY) and AstraZeneca (LON:AZN).

Index seen higher

IG’s opening calls suggest that the Footsie will start trading 0.27 percent higher at 7,136 points. The blue-chip index is likely to take cues from the US where shares rose last night, following the mid-term elections which saw Democrats gain control of the House of Representatives, in line with expectations.

“We believe (out of consensus) that a split Congress is the best outcome for US and global equity markets,” Marko Kolanovic, an analyst at JP Morgan, commented in a note, as quoted by CNBC. “As the President cannot count on Congress or the Fed for more easing, he will need to do what is in his power to keep the economy rolling – drop the damaging trade war and turn it into a winning deal.”

Asian markets have tracked the US higher this morning while yesterday, the FTSE 100 gained 76.60 points to close 1.09 percent higher at 7,117.28.

Thursday’s releases

Today’s macroeconomic statements include the UK services purchasing managers’ index (PMI) for October, due out at 09:30 GMT. IG reports that the index is expected to have inched higher, from 53.9 to 54. In the US, the nation’s non-manufacturing PMI for October will be announced at 15:00 GMT.

In company releases, Sainsbury’s will post its interims amid the ongoing merger process with Asia, while AstraZeneca’s results will follow a couple of recent rights disposal deals. Other blue-chips reporting today include National Grid (LON:NG) and Burberry (LON:BRBY).

BP (LON:BP) and Whitbread (LON:WTB) will be trading without the attraction of their latest dividend in today’s session and Reuters’ calculations suggest that the effect of the resulting adjustment to prices by market-makers would take around 6.2 points off the FTSE 100.

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