FTSE 100 preview: Footsie to push even higher

By This Is Money
Updated: 03:25 EDT, 10 September 2009

Britain's FTSE 100 index is seen opening 6 to 9 points, or 0.2% higher today, according to financial bookmakers, modestly extending Wednesday's push above the 5,000 level after good gains overnight on Wall Street and in Asia, awaiting news from the Bank of England.

On the rebound: The Footsie has stormed past the 5,000 barrier

The UK blue chip index closed 56.96 points or 1.2% higher yesterday at 5,004.30, ending above the 5,000 level for the first time since late September fuelled by strength in heavyweight oils and banks.

Oil majors are also likely to drive the early gains today after crude prices edged above $71.50 a barrel in Asian trade following bullish inventory data and soothing words from OPEC.

The oil producers cartel left output unchanged, as expected, with Saudi Oil Minister Ali al-Naimi saying prices were being driven by economic recovery, and that high levels of inventory had become irrelevant to the market.

The UK blue chip index has rebounded 45% since hitting a floor in March, but remains 8% below its level prior to the collapse of Lehman Brothers a year ago, which sent shockwaves through the global financial system.

Following the latest two-day meeting of its Monetary Policy Committee, the Bank of England is not expected to change UK interest rates or up its spending on quantitative easing and it will be at least a year before it exits the programme designed to boost money supply, according to a recent Reuters poll.

Median forecasts from a poll of around 60 analysts, taken Sept 1-3, suggest the bank will cap its government bond purchases at £175bn, although over a third of respondents said the MPC could expand the programme even further when it meets on Sept. 10.

Ahead of the BoE announcement, Halifax will issue its house price index for August at 09.00am today. July US international trade numbers and the weekly US jobless claims will be a focus in the afternoon.

Fashion firm Burberry Group joins the FTSE 100 index today as a replacement for information provider Thomson Reuters.

Thomson Reuters' shares were delisted in London from close of trade yesterday as the firm simplifies its capital structure to focus on its listings in New York and Toronto.

Whitbread, Segro, and Rentokil Initial will enter the FTSE 100 index later this month after the latest quarterly review, index compiler FTSE said after the close yesterday.

The three are set to replace Pennon Group, Balfour Beatty and Foreign & Colonial Investment Trust.

UK stocks to watch today are:

Creditor banks of Arcandor have launched a placing of its 43.9% stake in travel firm Thomas Cook, currently held as collateral against a loan taken out by the insolvent German retailer, via an accelerated bookbuild.

W.M. Morrison delivers first-half results.

The Argos and Homebase owner Home Retail Group issues a second-quarter trading update.

Following the rejection of its first offer for Cadbury, US firm Kraft Foods intends to make a higher bid with a greater proportion of cash as soon as possible, according to people familiar with the matter, The Guardian said.

BHP Billiton announced yesterday that the Shenzi field in the deepwater Gulf of Mexico, which began production on 23 March 2009, has now exceeded the facility's nominal capacity of 100,000 barrels of oil per day by having achieved sustained rates of 120,000 barrels of oil per day.

GlaxoSmithKline won a US Food & Drug Administration panel's support yesterday for a cervical cancer vaccine, moving the company closer to competing in the United States with a rival vaccine from Merck.

RSA Insurance has abandoned plans to move to Ireland, due to its more favourable tax regime following discussions with the Government, the Daily Telegraph said.

Drinks firm Diageo has rejected alternatives to its factory closure plans, scuppering any hopes of saving hundreds of jobs in the whisky industry, the Guardian said.

Transport group National Express is ready to accept a £765m offer from CVC-Cosmen after the board voted to recommend the bid, the Daily Telegraph reported.

Although the former head of British Sky Broadcasting, Tony Ball, was offered the post of chief executive at ITV over a week ago, Ball and the broadcaster have yet to agree terms and conditions, the Financial Times said.

Investors in housebuilder Berkeley Group, staged a minor mutiny yesteryda with 27% of shareholders failing to endorse a remuneration plan for key executives at the annual general meeting, The Times said.

The electrical goods retailer Kesa issues a first-quarter trading update. Also, Kesa's Comet electricals retail chain is to offer a scrappage scheme for domestic appliances from today until Monday, as part of a recycling initiative to be made available in 250 stores, The Times said.

Carpetright holds its annual general meeting.

Housebuilder Redrow reports full-year results.

Construction firm Galliford Try and insemination group Genus post full-year results.

Food retailer Hilton Food Group posts second-quarter results.

IT firm Vero Software reports first-half results.