US lift for FTSE as geopolitical concerns abate

THE FTSE 100 is looking set to open back up above the psychologically important 6,000 level this morning, taking its lead from a belated rally in US stocks after the close of European bourses on Friday.

GFT is quoting the FTSE 100 index to open up 23 points from Friday’s close, at a level of 6,020. Elsewhere in Europe the German Dax is called up 13 points at 7,229, and the French CAC is quoted up 10 points to open at 4,057.

Important US jobs data was mixed on Friday with the payrolls number coming in at a lower-than-expected 36,000, but the unemployment rate dropping 0.4 per cent to 9 per cent.

Ultimately, optimistic US investors chose to focus on the positive, an unemployment rate at its lowest level since April 2009, and Europe is expected to take a similarly optimistic lead on the open today.

Last week’s potential fly in the ointment, the unrest in Egypt, caused little more than a knee-jerk wobble to Western stock markets. With money now being switched out of emerging market funds in favour of more developed markets, investors seem ready to buy into any dips.

This Thursday’s interest rate decision by the Bank of England will be a key event, as though rates are widely expected to remain on hold at 0.5 per cent, cracks are starting to show in the MPC thanks to continued inflationary pressures. And with two members voting for a raise at the last meeting, the timing of future rises is very much on the radar.

Martin Slaney is GFT’s director of global dealing operations.