FTSE 100 preview: Ex-dividends knock shares

By Reuters
Updated: 03:09 EDT, 18 November 2009

The FTSE 100 was seen 2 to 8 points lower on Wednesday, as investors were cautious following a mixed showing in Asia and keen to lock in profits after sharp gains earlier in the month.

Market watcher: Investors are expected to book profits.

The blue-chip index closed 0.7% lower on Tuesday at 5,345.93 points, but is still up almost 6% this month and 54.5% since touching a six-year trough in March.

Japan's Nikkei fell to its lowest close in six weeks on Wednesday. But other Asian stocks were positive and US stocks rose to fresh 13-month highs on Tuesday.

Investors will keep a close eye on Cadbury after it emerged that chocolate makers Hershey and Ferrero SPA are considering a joint bid for the British confectioner that could help it fend off a hostile takeover by Kraft Foods.

Investors awaited Bank of England minutes, US CPI and US housing starts data to give more clues on the health of the economy and the outlook for monetary policy on both sides of the Atlantic.

Ex-dividend factors are set to take 10.99 points off the index with six companies including Vodafone, Barclays and Unilever all losing their payout attractions.

Tesco is not interested in any assets bailed-out banks Lloyds and Royal Bank Scotland will be forced to sell to satisfy EU antitrust worries, the head of Tesco Personal Finance said.

The chance of BHP Billiton making another attempt to take over rival Rio Tinto soon after a bid ban expires later this month is low, analysts said on Tuesday.

Europe's steel industry has voiced strong opposition to a planned $116bn iron ore joint venture by the miners and has called on European regulators to oppose the deal.

Antofagasta Minerals, the mining arm of Antofagasta is on track to meet its 2009 copper output target of 445,000 tonnes and improve earnings for the rest of the year, its chief executive told Reuters on Tuesday.

Burberry is looking to expand leather goods, children's wear and sportswear, its creative head said.

Britain's government has batted away complaints from three top brokerages about 'bullying' and unfair competition by bailed-out lenders, telling them to make a virtue of their independence or turn to the consumer watchdog.

There will be updates today from Wolseley, Capita, Experian, Land Securities, Bovis Homes Group, Close Brothers, Mothercare and The Restaurant Group.