Politics

FTSE 100 to start slightly lower as investors remain cautious over economic recovery

The FTSE 100 is expected to open slightly lower on Wednesday as investors remained cautious ahead of..

Published

May 6, 2020

The FTSE 100 is expected to open slightly lower on Wednesday as investors remained cautious ahead of economic data that will reflect the impact of the coronavirus on the world economy.

Analysts at spread-better IG are expecting the FTSE 100 to open around 9 points lower after ending Tuesdays session 95 points higher at 5,849.

Markets appear to be uncertain around exactly what kind of economic recovery will take place as the world begins to emerge from its pandemic lockdown.

Todays UK construction PMI will provide further clarity on the British economic situation following Tuesdays record low for services sector activity, while later in the day markets will be bracing for the US ADP unemployment numbers ahead of the expected horror show on Friday of the US non-farm payroll data.

Wall Street managed a positive performance overnight, with the Dow closing 0.56% higher at 23,833 while the S&P 500 climbed 0.9% to 2,868 and the Nasdaq rose 1.13% to 8,809.

The US markets have been boosted by the easing of lockdown restrictions in some states as well as a scramble to take advantage of research into a coronavirus vaccine by publicly traded companies.

The positivity around an economic recovery continued in Asia on Wednesday as the Hong Kong Hang Seng rose 1%. Markets in Japan were closed due to a public holiday.

On the currency markets, the pound was 0.11% lower at US$1.2428 against the dollar, however, the construction PMI and US ADP employment figures later today could provide a catalyst for movement.