Stocks & Shares Indices

FTSE 100 preview: Footsie seen steady despite Middle East tensions

The FTSE 100 looks set to start the last trading day of the week in positive territory, holding steady despite trade war worries and tension in the Middle East. On the corporate front, Royal Dutch Shell (LON:RDSA) will likely stay in focus as it got a go-ahead for exploration plans for Mexico.

FTSE 100 seen higher

IG’s opening calls suggest that the Footsie will start trading 0.15 percent higher at 7,380 points. In the US, shares rose last night, with gains in Disney helping prop up investor sentiment. Asian shares, however, have retreated this morning, while oil prices have advanced amid supply concerns following attacks on tankers in the Gulf of Oman.

CNBC quoted strategists at RBC Capital Markets as saying in a note that the attacks “underscore the severity of the security risks stemming from the Iran crisis and the difficulty of achieving a diplomatic off-ramp as long as the crippling US sanctions remain in place”.

Investors meanwhile are staying on the sidelines ahead of a Federal Reserve meeting next week, with the US central bank expected to cut rates.

“There is a large degree of uncertainty going into next week’s FOMC (Federal Reserve Open Committee) meeting as market reaction will differ significantly depending on whether the Fed hints toward easing policy,” said Shusuke Yamada, chief Japan FX and equity strategist at Bank Of America Merrill Lynch, as quoted by Reuters. “A wait-and-see mood is likely to begin prevailing in the markets ahead of the FOMC.”

At home, the Footsie closed little changed yesterday, adding less than a point to end trading 0.01 percent higher at 7,368.57, as investors digested corporate updates.

Friday’s agenda

Today’s macroeconomic statements include US retail sales data for May due out at 13:30 BST. In FTSE 100 company news, Reuters reports that Mexico’s oil regulator approved exploration plans for four Shell-operated deepwater areas, after it gave the green light to five others earlier this week, committing the oil major to invest at least $791 million. Specialty chemicals group Johnson Matthey (LON:JMAT) meanwhile has published its annual report this morning.

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