The FTSE remained flat in early trading this morning, up just 3 points after US indexes pulled back yesterday following General Electric’s sell off as concerns on the security of its dividend gained momentum. This in turn dampened general sentiment on Wall Street.
The worst performer this morning for the FTSE has been Whitbread. The Group’s first half results showed evidence of a summer slowdown, with revenues at Premier Inn hotels and Costa Coffee arms both softening despite a solid profit performance. Shares were down 4%.
The reason for the FTSE’s lacklustre performance may be attributed to investor sentiment in the Pound. With mixed messages coming from the Bank of England’s policy makers, the expectation for a Pound boosting interest rate rise are far from certain. However, tomorrow’s inflation report reading may help provide some direction for both Sterling and the FTSE.
Tomorrow is also a big day for the Euro with the ECB expected to announce tapering measures. FxPro analyst, Edward Anderson commented “The markets are expecting an announcement in regards to the ECB paring back its bond buying program on Thursday. If the reductions result in EUR 20 to 30 Billion per month an increase in Eurozone interest rates will be highly unlikely until 2019.”
US equity markets retreated on Monday as General Electric’s sell-off weighed on wider market sentiment. Accendo Markets analyst, Henry Croft noted “The Dow Jones closed 55 points lower as the heavily weighted Boeing, Goldman Sachs, McDonalds and IBM all dipped, while the S&P 500 dropped 0.4% and the Tech-focused Nasdaq fell 0.6%.”
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