FTSE 100 Openings: Supported by good global statistics and higher optimism over the US presidential election, the FTSE 100 index started off on Tuesday with an upbeat start increasing 0.2% to 8, 201.40 points. Strong expansion in the service sector in China boosted attitude on the European markets as investors wait for the election results, which might change fiscal policy in the US.
Key market drivers: US election and Chinese economic data
European stocks experienced good momentum as the Chinese service sector displayed a startling October acceleration. From September’s 50.3 and ahead of market estimates, the services sector scored up to 52.0 in October according to S&P Global’s Caixin General Services Index. This increase signals to growing consumer demand in China, which gives hope for the world market despite recessionary concerns.
Jim Reid of Deutsche Bank said on how the election affected the markets: “I have absolutely no idea who will win [the US presidency].” Under a split government, he observed, the probability of less fiscal stimulus would favor government bonds and would cause Federal Reserve interest rate decreases.
Key areas and AB Foods’ UK share price increases
Rising 2.6% after stating a 50% dividend rise to 90.0p, AB Foods shone out in the FTSE 100. A 2% increase in income to £20.07 billion helped the company to show a 43% growth in pre-tax earnings to £1.92 billion. With revenues rising 5% to £9.45 billion, iconic retail business Primark made a noteworthy contribution.
While the Cboe UK 100 was up 0.1%, reflecting the widespread confidence, the FTSE 250 also gained momentum jumping 0.3% to 20,530.87 points.
Oil prices and the currency market capture post-election anxieties.
The US dollar was strong ahead of the election results, thus the pound rose to trade at $1.2982 from $1.2972 at the end on Monday. Early on Tuesday, Brent crude touched $75.05 per barrel, signaling confidence in consistent demand as the Chinese economy recovers and driving up oil prices.
Outlook: Bank of England decision and US market effect
One is seeing significant interest in the forthcoming interest rate decision of the Bank of England. “Direct directional decisions could well be dominated by the fate of the ‘Trump trade’ as UK markets take their cue from US dynamics,” Lloyds analysts said, considering that the result of the US election may have consequences for global fiscal policy.
Market watchers remain wary as the election takes front stage during the week. While maybe causing deflationary pressures in nations like Australia, Rabobank analysts speculated that a Trump win might result in “universal tariffs” sparking temporary inflation in the US.
Strong UK and Chinese economic data is enabling the FTSE 100 to maintain its bullish trajectory as investors monitor events in the US election, so it is a top priority for world financial markets.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Please consult a qualified financial advisor or conduct your own research before making investment decisions.
