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Election jitters look set to drag back the Footsie

Published: 15:45 05 May 2015 AEST

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The FTSE 100 is expected to start a truncated marking time as Britons prepare to go to the polls.

A lack of electoral direction – with neither of the two parties expected to gain an overall majority on Thursday - appeared to be weighing on sentiment.

In Asia overnight the major stock indexes fell with the Shanghai Composite off 2% and Hong Kong down 1% there, though was little liquidity with Japan, Korea and Thailand closed for business. 

Australia’s ASX reversed early gains to post a 0.2% decline after central bankers cut interest rates by quarter of a percentage point to 2%. 

The stock market tumble mystified some market commentators.  

“The [Reserve Bank of Australia] statement was perhaps a little more upbeat than some would have expected. Improved trends in household demand, stronger employment growth and consistency in targeting inflation were the positives,” said Stan Shamu, of spread betting firm IG. 

“To the downside, a drag on private demand will impact capital expenditure across the mining and non-mining sectors, while public spending is scheduled to be subdued.” 

On Wall Street, the Dow had ended Monday up 0.26%, while the S&P 500 gained 0.3% and the technology-led NASDAQ rose 0.23%.

Here in the UK, the IG is predicting the FTSE 100 will drop 13 points on open to 6,972.95.

The big scheduled news of the week comes from some titans of the old economy with Asia-bound HSBC reporting later today, followed on Wednesday by druggie GlaxoSmithKline and Imperial Tobacco, which plans its earnings release for the same day.


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