FTSE 100 preview: Downbeat Fed drags on shares

 

The FTSE 100 index is seen opening down 18-25 points, or as much as 0.5% on Thursday, according to financial bookmakers, giving back some of Wednesday's gains after dull showings on Wall Street and in Asia as investors digest comments from the US Federal Reserve.

US Federal Reserve Chairman Ben Bernanke

Party pooper: US Federal Reserve Chairman Ben Bernanke reminded markets that support will end.

The UK blue chip index closed 34.49 points, or 0.7% higher on Wednesday at 5,320.26 lifted by strength in commodity, and banking issues.

US stocks finished flat to slightly higher on Wednesday after the Federal Reserve, keeping interest rates unchanged, reiterated its intention to keep rates low for the foreseeable future to ensure a sustainable economic recovery.

Wall Street, however, trimmed gains after the central bank's policy-making committee also reminded markets it will let most of the special liquidity facilities, which have helped bolster the US banking system after last year's credit crisis, expire by early next year.

On the UK economics front, November retail sales data will be released with a 0.4% month-on-month rise forecast, the same as in October, while the annualised increase is at 3.5%, up from 3.4% in the previous month.

Adding to the picture on the UK high street, the CBI distributive trades survey will be released.

Across the Atlantic, the latest US weekly jobless claims will attract attention with December's Philly Fed index and November leading indicators both due for release.

Deutsche Bank has emerged as a key bidder for commodities trading company RBS Sempra, the Financial Times reported on Thursday. Part-nationalised RBS said in November it was selling its 51% stake in the firm, which it jointly owns with Sempra Energy.

Ohio's attorney general on Wednesday filed a lawsuit against the mortgage servicing unit of Barclays Capital that expands an attack on mortgage companies that he says are failing the state's troubled homeowners.

National Australia Bank has received approaches over its Clydesdale and Yorkshire banking units in the UK amid consolidation in that country's banking industry.

Rio Tinto is to lose two of its most senior non-executive directors next year, the Times newspaper reported.

Also, the world No.2 iron ore miner will make its first sale of iron ore from its mines in Australia to India, a company spokesman said on Thursday.

Every country should unite in opposition to a 'monopolistic' production joint venture between Rio Tinto and BHP Billiton, China's steel industry association said on Thursday.

British Airway's cabin crew who voted to strike in a dispute over job losses and changes to working practices have questioned the tactics of their union leaders, The Independent newspaper reported.

Private-equity investor Bridgepoint Capital has upped its offer for Care UK, valuing the health and social care provider at between £275m and £300m, the Financial Times reported on Thursday.

Guardian Media Group has discussed selling its GMG Regional Media division, which includes the Manchester Evening News, to rival Trinity Mirror, the Daily Telegraph said.

Retailer Asda is to review its relationship with Savills after the estate agent's director of retail planning, Jeremy Hinds, criticised Competition Commission proposals to introduce a competition test for proposed supermarket sites, proposals which are supported by Asda, the Daily Telegraph said.

Flyglobespan, the largest airline in Scotland, has collapsed into administration and all of its scheduled flights from Glasgow, Edinburgh and Aberdeen - as well as transatlantic flights from other UK hubs - have been cancelled, the Financial Times said.

Deutsche Telekom and France Telecom are shunning regulators in London and pressing Brussels to scrutinise the proposed merger of their UK mobile phone businesses, the Financial Times said.

There will be updates today from John Wood Group, Travis Perkins, Arriva, Senior, McBride, JJB Sports, Chrysalis and Clapham House.