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FTSE 100 preview: Index set to open lower

Opening calls from IG suggest that the UK benchmark Index will start Tuesday's session 0.22 per cent in the red at 7574. Whilst this is a drop from yesterday's close, it is still way ahead of Monday’s opening calls.

Mining boosts FTSE 100

The rise yesterday was largely a result of strong mining stock, which made significant leaps following renewed trade talks between the US and China. The renewed confidence was also felt overseas with both US and Asian markets seeing gains. At their respective time of close, the SHANGHAI SE COMPOSITE INDEX (SHCOMP) ended with a gain of 1.11% at 2,698.47 (+29.50), the HANG SENG (HSI) was up 1.41% at 27,598.02 (+384.61) and the DOW was up 0.35% at 25,758.69 (+89.37).

The biggest FTSE 100 riser was Evraz PLC (LON:EVR) which saw gains of 2.81 per cent ending the trading day on 479.70 (+13.10). Other FTSE Mining companies, Anglo American PLC (LON:AAL) and Glencore PLC (LON:GLEN) also enjoyed gains of 1.9% and 1.2%, respectively.

Caution over gains

Whilst this may seem like good news for investors, Fiona Cincotta, (senior market analyst at City Index), issued caution over the sustainability of these gains: She said: “There is a chance that the markets are getting ahead of themselves here given the gapping differences between the US and China on fundamental issues such as technology transfer, subsidies and local market protectionism, Proactive Investors reported.

Mulberry losses

Meanwhile, despite the overall positivity in yesterday’s results, there were significant losses made by both Mulberry (LON:MUL), which dropped almost 30 per cent, closing the day on 400.00 GBX −169.00 (29.70%) and The Sage Group (LON:SAGE) which dropped 7 per cent closing at 619.20 GBX −46.60 (7.00%).

Tuesday's calendar

Today’s releases include a highly anticipated Final Year end results report from BHP Billiton (LON:BLT),with investors expecting glowing reports of continued growth, and a First Half results from Persimmon PLC (LON:PSN) which is again expected to show substantial increases. In other news, Easyjet PLC (LON:EZJ) also made significant gains yesterday, closing the trading hours on 1,607.00 GBX +32.50 (2.06%), a vast improvement on the drops it suffered early last week. Polymetal International are also due to release their half year reports today.

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