FTSE preview: Lloyds short-sellers

 

The FTSE 100 index is seen opening little changed today, steadying after falls in the previous session as investors look ahead to the next round of US earnings for further clues as to the pace of economic recovery.

The sign and logo of the London Stock Exchange

Financial bookmakers see the blue-chip index opening down 1-7 points, having closed 32.7 points lower on Friday at 5,190.2 after disappointing third-quarter results from Bank of America Merrill Lynch and General Electric and a weak US consumer sentiment survey.

No major UK or US economic data will be released during the session on Monday, but overnight a survey said that asking prices for homes in England and Wales rose on an annual basis for the first time in more than a year in October.

Property website Rightmove said house prices in England and Wales were buoyed by a dearth of properties coming onto the market.

Investors' main macro focus this week will on be the first reading for Q3 GDP figures, due on Friday. British GDP growth will struggle to hit 1% in 2010, according to the Ernst & Young ITEM Club's autumn forecast.

The Bank of England must continue its policy of quantitative easing because the financial system has yet to recover fully, Monetary Policy Committee member Adam Posen said in a newspaper interview on Sunday.

With the corporate earnings focus remaining across the Atlantic, Apple is among a number of US companies set to report earnings later in the day.

China will be able to sustain the momentum of its current V-shaped recovery, setting the stage for stronger growth next year than in 2009, Yao Jingyuan, chief economist of the National Bureau of Statistics, said on Saturday.

• Short-sellers of Lloyds Banking Group are queuing up ahead of a possible rights issue, data showed on Saturday, a sign it would need to offer a heavy discount on its stock to escape further government control.

• Kazakh miner Eurasian natural Resources has received South African Competition Commission approval for offer for Camec. ENRC is planning to buy out its founders' African assets, in exchange for increasing their ownership in the company, The Independent on Sunday reported.

• Brewing giant SABMiller is in talks with FEMSA's family shareholders about an equity stake in an enlarged group, a source said, a move that would give it a strong lead in the race for Mexico's FEMSA Cerveza.

• Oil major Royal Dutch Shell has reduced gas flaring in southern Iraq by 15 to 20%, and is ready to finalise a deal to develop Iraq's rich gas resources, a Shell executive told Reuters on Sunday.

• Shares of Tullow Oil and Anadarko Petroleum Corp may be poised to rise, following significant oil discoveries in Africa, according to a report in business weekly Barron's.

• British banks could face 'regulatory arbitrage' if UK regulators impose tougher bonus and capital requirements than regulators in other countries, the chairman of Barclays told the Financial Times.

• The British government could undermine a recovery in the banking sector if it hits lenders with fresh taxes, Angela Knight, chief executive of the British Bankers' Association (BBA), told The Daily Telegraph.

• The bank offered 'lucrative' jobs to executives in Lehman Brothers handling the cut-price sales of assets to the British bank after the collapse of the U.S. investment bank according to documents filed with a U.S. bancruptcy court, the Daily Telegraph said.

• Panmure Gordon has urged Unilever to launch an 850 pence-a-share bid for Cadbury to benefit from a unique opportunity to 'become a leading player in the large, and highly attractive, global confectionery market', said the Daily Telegraph.

• British bus and rail group Stagecoach has made a £1.65bn all-share merger proposal to rival transport operator National Express, The Sunday Telegraph reported.

• Gold producer Petropavlovsk issues a trading update.

• The Conservatives would reverse UK government plans to make the BBC share £130m of the television licence fee with other broadcasters, the shadow culture secretary told the Financial Times.

• The debt-laden British yellow pages publisher's lenders are inching towards a crucial loan amendment that will allow its planned £500m equity issue to go ahead, banking sources said on Friday.

• John Lovering, the chairman of the British department store retailer, will announce this week that he will stand down from the post next year, The Sunday Times reported.

• Printer St Ives posts full-year results.

• Engineer Senior issues a trading update.

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