FTSE Opens higher following strong close on Wall Street

The FTSE 100 opened a notch higher, up 0.1% at 7,706.61 following on a 6th consecutive gain in the Dow Jones Industrial Average overnight. 

Asian markets mostly had a strong day Friday as the Nikkei rose 1.0% while the Hang Seng index traded 1.3% higher. However, the Shanghai Composite was down 0.1%. 

Utilities shares came under pressure on opening with Severn Trent, down 2.05%, United Utilities, down 1.31% and National Grid, down 0.65%, all trading lower, as the absence of big company news brought trading focus back to staple stocks. UK utilities are generally not the best loved stocks on the London market, and the sentiment was not helped by a similar decline in European markets Thursday when Italy’s Enel closed down 0.9%. 

Oil prices will be in focus Friday as Israel and Iran came to blows in an extensive military exchange in Syria. In response to what seems to have been an Iranian attack on Israeli territory from Syria, Israel responded with airstrikes on all Iranian infrastructure in Syria. 

This comes days after president Trump decided to withdraw from the Iran nuclear deal, a move that is about to cause tensions within Europe as Europe begun looking for ways to continue to trade with Iran rather than re-instate sanctions. Brent Crude rose to $77.25 a barrel early Friday and WTI was quoted at $71.25/bbl. 

Higher oil prices will also reflect on oil producer shares such as BP and Shell which have been trading higher for the best part of this week. The pound was also stronger in early trade at 1.3620 against the dollar and at 1.136 against the euro after the Bank of England decided to leave interest rates unchanged at its meeting Thursday. 

The bank downgraded its near-term growth outlook following a slew of weaker-than-expected economic data in May. Even though only a few weeks ago a rate increase seemed imminent this decision may now end up being postponed for later in the year. 

The sterling/euro pair will remain in focus throughout the day as the European Central Bank president Mario Draghi is due to speak at the EU State of the Union address in Florence. Draghi is expected to be positive about the Eurozone economy despite some recent weaker economic data.