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MARKET PREVIEW: FTSE 100 seen lower ahead of FOMC


Financial bookmakers are expecting UK stocks to open lower today, tracking overnight losses on Wall Street. The FTSE 100 is set to open at 5,617, down 18 points (0.3 percent) from Monday’s close after shedding 58 points (one percent) yesterday.

Today’s Chinese data was disappointing with the official PMI index hitting the lowest level in eight months, fuelling speculation that the government could soon announce more stimulus measures to support economic growth.

The gauge declined to 50.1 in July from 50.2 in the previous month, which means the manufacturing sector in China expanded at a slightly slower pace.

Earlier this week, HSBC reported that its China PMI index dropped to 49.3 last month from 48.2 in June.

Analysts are now turning attention to the US, where the Federal Reserve will make its policy statement this afternoon.

“As we previously stated, investors’ attention is squarely on the US as they await the release of the FOMC statement,” said analyst at Chris Tedder.

“Overall, we are not expecting much from the statement, which may lead to some disappointment in the FX market on the back of the recent push lower for USD. But the market is also not expecting a whole lot until the Fed’s next meeting in September.

Today’s macroeconomic calendar will also include the Institute for Supply Management’s (ISM) manufacturing index for July and weekly oil inventories data from the Department of Energy.

Across the Atlantic, the Dow Jones Industrial Average (DJIA) dropped 64 points (0.5 percent) to end the day at 13,008 and the broader S&P 500 index shed six points (0.45 percent) to close at 1,379.

Asian stocks moved in different directions today. Japan’s Nikkei 225 stood 83 points (0.95 percent) lower at 8,612 at the end of the session, China’s Shanghai Composite Index rose 21 points (one percent) to 2,124.

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