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MARKET PREVIEW: FTSE 100 seen higher after sell-off

Published: 02:01 24 Apr 2012 EDT

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UK stocks are expected to open higher this morning, recovering from yesterday’s sell-off, which saw the FTSE 100 shed more than 100 points. The UK’s blue chip index is set to open at 5,689, up 24 points (0.4 percent) from Monday’s close.

Equities around the globe were hit by the results of the first round of the French presidential elections and the resignation of the Dutch government, which had failed to agree on spending cuts.

In France, incumbent president Nicolas Sarkozy lost to Socialist François Hollande, who is widely expected to win the May 6 runoff.

“Overnight losses seemed to stem from the political uncertainty sweeping across Europe, with potential changes in government in Greece, Holland and France almost a direct protest against tough austerity measures imposed by those incumbent governments over the last 12 months,” said chief market strategist at IG Index Chris Weston.

“Given the shellacking equities experienced yesterday it is not surprising to see some modest bounces predicted on the open for European indices.

“That said, as we know sentiment can turn on a dime and will be dictated by eurozone news, economic data points and US corporate earnings.”

Today, investors will have a raft of US data to digest including new home sales figures for March from the Commerce Department and the S&P Case-Shiller house price index for February.

A Reuters survey projected the 20-city index to climb 0.2 percent, which would be the first gain since April last year.

On the corporate front, Apple (NYSE:AAPL) and Caterpillar (NYSE:CAT) will release their earnings reports today.

Across the Atlantic, the Dow Jones Industrial Average (DJIA) shed 102 points (0.8 percent) to close at 12,927 and the broader S&P 500 index dropped 11.5 points (0.85 percent) to end the session at 1,367.

Likewise, Asian markets were in selling mode today. Japan’s Nikkei 225 index fell 82 points (0.85 percent) to 9,460 and China’s Shanghai Composite Index was down 32.5 points (1.35 percent) at 2,356.

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