FTSE 100 Set to Open Lower as Global Markets Tumble

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Summary

  • The futures tied to the FTSE 100 tumbled 0.73 per cent to 6,583.80, indicating a negative start to the London equities on Friday.
  • The widespread jittery amid the market participants steered the Dow Industrials to close at 30,924.14, down 345.95 points, or 1.11 per cent on Thursday.
  • The Bank of England had fixed a spot exchange rate of 1.3974 USD and 1.1575 EUR against a unit of pound sterling on 3 March.

FTSE 100 is likely to open on a negative footing on Friday, 5 March, as fears surrounding an earlier-than-expected hike in the interest rates by the US Fed battered the mood of global equity investors. With the persisting challenge of maintaining the inflation target, and with most of the developed countries keeping the interest rates at record low levels, there can be a potential situation where the central banks can step in quite early to raise the borrowing costs.

Nasdaq at 2-month low

The widespread jittery amidst the market participants steered the Dow Industrials to close at 30,924.14, down 345.95 points, or 1.11 per cent. The broader benchmark S&P 500 closed at 3,768.47, down 51.25 points, or 1.34 per cent, while the tech-heavy indicator Nasdaq Composite lost 274.28 points, or 2.11 per cent to terminate at a fresh 2-month low of 12,723.47.

Asian equities mostly in red

A choppy trade on Wall Street reflected sharply in the Asian markets with most of the leading stock indices trading either in the negative territory or with marginal gains only. Japan’s Nikkei 225 slipped 0.66 per cent, South Korea’s Kospi fell 0.27 per cent, Australia’s ASX 200 tripped 0.74 per cent, India’s Nifty 50 shed 0.32 per cent, while China’s Shanghai Composite and Hong Kong’s Hang Seng traded 0.32 per cent and 0.06 per cent higher in the late afternoon deals.

Domestic jittery

The futures tied to the FTSE 100 tumbled 0.73 per cent to 6,583.80, indicating a negative start to the London equities on Friday. Meanwhile, the domestic investors continued to struggle in regaining the lost optimism after the Budget presentation by Chancellor of the Exchequer Rishi Sunak. Moreover, the upcoming set of macro data slated to be released in the early afternoon today kept the market participants on the brink.

Including the balance of trade for the month of January, alongside the metrics of manufacturing production, industrial production, and construction output for the corresponding month are scheduled to be released by the Office for National Statistics (ONS) in the second half of the day. Among the major heavyweights, London Stock Exchange Group Plc is the only FTSE 100 company to announce its Q4 and FY20 earning report card.

GBP stays below 1.39

The Great Britain pound (GBP) extended losses slightly on Friday, against the United States dollar (USD) as the greenback restored some strength after the US Fed Chairman Jerome Powell commented on bond yields. Of late, the US dollar has gained slightly against a basket of currencies as investors continued to snap up the dollars, anticipating a faster-than-expected bounce back in the US economy.

At around 0625 GMT, the GBP vs USD pair traded at 1.3888, down 0.04 per cent from the previous close of 1.3894 at the interbank foreign exchange market. During the day so far, the currency pair has oscillated between a low and high of 1.3868 and 1.3907, respectively. The Bank of England had fixed a spot exchange rate of 1.3974 USD and 1.1575 EUR against a unit of pound sterling on 3 March.

 

 


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