FTSE 100 preview: Rates in focus after US rally

By Reuters
Updated: 03:09 EDT, 10 December 2009

The FTSE 100 is seen opening flat on Thursday, according to financial bookmakers, with investors wary after a late rally by US equities largely failed to carry through into Asia, and as they await the latest pronouncements from the Bank of England.

Market watcher: Traders will diegest Pre-Budget and interest rate news.

The UK blue chip index is seen opening 4 points lower to 1 point higher according to financial bookmakers, having closed down 19.24 points, or 0.4%, on Wednesday at 5,203.89 mirroring early falls on Wall Street.

US stocks, however, ended higher on Wednesday, reversing earlier losses, as a weaker dollar fuelled appetite for riskier assets, boosting shares of financial, technology and natural resource companies.

No significant domestic data is due for release on Thursday, so all eyes will be on the Bank of England's deliberations, to be unveiled at midday, although no change is predicted to either interest rates or the central bank's quantitative easing policy.

After last week's much less than expected fall in US non-farm payrolls, the latest US initial weekly jobless claim numbers will be of interest this 'afternoon, as will October's US international trade figures.

Hershey and the trust that controls it are close to deciding whether to bid for rival confectionery firm Cadbury, The Wall Street Journal reported Wednesday evening, citing sources close to the matter.

French President Nicolas Sarkozy and British Prime Minister Gordon Brown called for an exceptional tax on global bank bonuses in a joint column published in Thursday's Wall Street Journal.

Barclays Capital fought back on Wednesday against claims by Lehman Brothers Holdings that it got too good a deal when it bought Lehman's core US brokerage last year, in court papers filed on Wednesday.

HSBC Holdings said an ex-employee stole client data from its Swiss private bank's headquarters in 2006 and 2007, a new breach of Swiss bank secrecy, although fewer than 10 clients were involved.

Also, HSBC is closing in on the remaining Asian retail and commercial assets being sold by Royal Bank of Scotland, The Financial Times said.

Cytokinetics said it has agreed with GlaxoSmithKline to end a collaboration and license agreement for Cytokinetics' experimental oncology drug. Negotiations with union members over planned job cuts by Diageo in Scotland have come to an end with Unite members accepting the cuts, The Independent said.

Stagecoach's chief executive Brian Souter says he has 'kissed and made up' with Lord Adonis, the secretary of state for transport, months after declaring the department was 'dysfunctional', The Guardian said.

Norcros, the Triton showers to Johnson Tiles firm, could be a takeover target for Topps Tiles, with speculation the retailer is lining up a 20 pence a share cash bid, according to the Daily Mail's Market Report.

Alliance Boots, which is celebrating 160 years of the Boots name, is setting its sights on overseas expansion as it looks to build on progress since its 12.4bn pound buy-out in 2007, The Financial Times said.

Temporary power producer Aggreko will enter the FTSE 100 later this month, replacing pest control-to-parcel delivery firm Rentokil Initial after a quarterly review, index complier FTSE said after the market close on Wednesday.

There will be updates today from DS Smith, Premier Farnell, Sports Direct and Mulberry.