Though the day started well for the FTSE the index slipped in early afternoon taking its cue from a nervous start of the day on Wall Street induced by big declines at car makers and ahead of the next round of earnings.
Amazon (NASDAQ:AMZN) and Google-owner Alphabet (NASDAQ:GOOGL) will report their second-quarter figures after the US markets close Thursday completing the big tech company earnings following Facebook’s results Wednesday. Investors expect a mixed bag of numbers from the two companies in contrast to Facebook’s better-than-expected earnings and are also building in some caution on the FAANG shares which are now under investigation for anticompetitive behaviour by the US Department of Justice.
Sage Group PLC (LON:SGE) drops 10%
In London, Sage Group shares lost over 10% in value after the company reported a sharp decline in its software revenue while utility SEE has weakened over 6% after it recently said its renewable energy output in the early part of this year was lower than expected. AstraZeneca was holding up at the other end of the index following a strong set of results.
Euro drops then bounces after ECB meeting
The euro staged an impressive turnaround after the European Central Bank opened the door to a future interest rate cut at its policy meeting Thursday bouncing up almost 0.4% in choppy trade.
As expected the bank left its key deposit rate at -0.4% but stressed the need for active involvement to get inflation back up to its targeted level of 2% and changed its forward guidance. The ECB also held out the prospect of further measures to ease monetary policy designed to prop up the ailing Eurozone economy affected by US-China trade tensions and the prospect of a hard Brexit.
Currency traders are also positioning themselves for a quarter point rate cut by the Federal Reserve next week, the first in almost ten years. The dollar initially bounced up on early euro weakness but as the common currency regained its stride the dollar also weakened against the pound in anticipation of the Fed rate cut.