FTSE preview: Shares to recover US falls
The FTSE 100 index is seen rising on Tuesday, recovering after sharp falls in the previous session when S&P downgraded its outlook on the US credit rating to 'negative', with investors seen likely to tread with caution as we head towards the Easter break.
Jumpy: Shares have been volatile.
A raft of corporate news is due for release on Tuesday. Retailers could come into focus as Tesco posts results, as could the luxury goods sector, with both Burberry and LVMH scheduled to unveil numbers.
Across the Atlantic, Goldman Sachs, Intel Corp and IBM are among companies reporting.
The UK blue chip index looks set to climb 6 to 11 points, or as much as 0.2%, according to financial bookmakers, after it ended down 125.93 points, or 2.1%, at 5,870.08 on Monday - its lowest close since March 23.
The FTSE 100 volatility index, a barometer of investor anxiety, jumped nearly 26% on Monday, its biggest one-day percentage gain since November 2009. The higher the index, the lower investor appetite for risky assets such as stocks.
Wall Street fell more than 1% on Monday. Rating agency Standard & Poor's slapped a negative outlook on the United States's top-notch credit rating and said there's at least a one-in-three chance that it could eventually cut it.
'This news is certainly going to skew demand for risk - we've already seen gold come within a whisker of the big $1500/an ounce level and this may lend a degree of support amongst the mining sector and precipitate the typical defensive moves into non-cyclical,' Chris Weston, institutional trader at IG Markets, said.
'But otherwise, with volumes thinning out ahead of the long Easter weekend in Europe, there may be little reason to move back into the market just yet.'
With no important UK economic data scheduled for release on Tuesday, investors will be looking across the Atlantic for further macro direction, with US March housing starts numbers due.
Technical analysis for the FTSE 100 on a long-term view looked bearish. 'Looking at the rally from the March 15 bottom at 5,591.59 to the April 11 top at 6,070.78, it appears this index is set up for a decline to 5,831.19 to 5,774.64,' James Hyerczyk, an analyst at Autochartist, said.
However, he added: 'A test of this price zone is likely to trigger interest from value-based buyers.'
Vedanta Resources bought an 11% stake worth about $1.5bn in Cairn India through block deals in the market, a source said, even as Vedanta faces a delay in its $9.6bn acquisition of the energy firm.
A multi-million pound pay deal for Royal Bank of Scotland's chief executive and the lender's mounting losses in Ireland are set to come under attack at its annual investor meeting on Tuesday.
Tesco is expected to post a 10% rise in underlying profit to £3.75bn for the year ended February, according to the mean forecast of 15 analysts polled by Reuters.
There will be updates today from SABMiller, Burberry, Reed Elsevier, Hargreaves Lansdown and Redrow.
Most watched Money videos
- How to invest for income and growth: SAINTS' James Dow
- Blue Whale fund manager on the best of the Magnificent 7
- Land Rover unveil newest all-electric Range Rover SUV
- 2025 Aston Martin DBX707: More luxury but comes with a higher price
- BMW's Vision Neue Klasse X unveils its sports activity vehicle future
- BMW meets Swarovski and releases BMW i7 Crystal Headlights Iconic Glow
- Skoda reveals Skoda Epiq as part of an all-electric car portfolio
- 'Now even better': Nissan Qashqai gets a facelift for 2024 version
- Tesla unveils new Model 3 Performance - it's the fastest ever!
- Mini celebrates the release of brand new all-electric car Mini Aceman
- Mini Cooper SE: The British icon gets an all-electric makeover
- MailOnline asks Lexie Limitless 5 quick fire EV road trip questions
- CITY WHISPERS: Bill Ackman's cerulean eyes charm...
- FTSE 100 hits an all-time high - but remember the stock...
- TONY HETHERINGTON: Boss behind firms fined £340k for more...
- Cost-of-living crunch wipes shine off Thomas Sabo jewellery
- MIDAS SHARE TIPS UPDATE: Wind is turning in Octopus...
- As world lurches from crisis to crisis, experts share...
- 86-year-old Peter's woes with a faulty smart meter that...
- Britain's nascent battery industry receives shot in the...
- Shipping broker Clarksons on list of shame after...
- Where is Labour's 'white heat' revolution to revive...
- North Sea projects worth £21bn put at risk by Labour: Tax...
- JOHCM UK EQUITY INCOME FUND: Rate cuts... and a spending...
- Virgin Money's biggest independent investor...
- British businesses awash with 'accidental' bosses who...
- MIDAS SHARE TIPS: Why it soon won't be hip to give the...
- Hollywood silly money? I'd only have stuffed it under the...
- Helium and hydrogen company set to join stock market in...
- Ikea pushes back opening of its Oxford Street store to...