FTSE 100 preview: London to ride US gains

By Reuters
Updated: 03:00 EDT, 21 December 2009

The FTSE 100 is seen opening 22 to 30 points higher, or up as much as 0.6% on Monday, according to financial bookmakers, recovering from Friday's falls in tandem with pre-weekend gains on Wall Street and advances in Asia on Monday.

Market watcher: Shares are expected to gain in run up to Christmas.

The UK blue chip index closed 20.80 points, or 0.4% lower on Friday at 5,196.81 impacted by weak financial issues, with the blue chip index losing 1.2% overall in the final full trading week of 2009.

US stocks rose on Friday in choppy trade as quarterly results from Oracle and Research In Motion lifted the Nasdaq more than 1%, and Asian markets rose broadly on Monday also led higher by high-tech stocks.

Britain faces a long road to recovery and growth will be modest in 2010, but that will not prevent the Bank of England from raising interest rates early next year, according to the Confederation of British Industry's latest quarterly economic forecast.

No important domestic economic data is due for release on Monday, although investors will be looking towards Tuesday's release of the final reading for UK third-quarter GDP, and the publication on Wednesday of minutes from December's Bank of England Monetary Committee meeting to provide some direction in this shortened pre-Christmas trading week.

The only US data of interest due on Monday will be November's Chicago Fed index.

Investors will keep an eye on Dubai, where debt-ridden conglomerate Dubai World is expected on Monday to ask key creditors for more time to pay off its loans.

The Gulf Arab emirate's flagship company is expected to formalise a request for a payment standstill at a meeting with some 90 creditors.

Temporary power supplier Aggreko joins the FTSE 100 index on Monday, with support services firm Rentokil Initial demoted back to the mid caps.

Royal Bank of Scotland has narrowed the bidders for its commodities trading joint venture to three and will announce a winner within weeks, the Sunday Times reported, citing sources close to the negotiations.

HSBC is planning a five billion pound share offer to Chinese investors as it looks to become the first international company to list on the Shanghai stock exchange, The Observer said.

Royal Dutch Shell is planning to sell oilfields in Nigeria valued at up to $5bn, the Sunday Times reported, citing sources linked to companies interested in the assets. Also, a group led by Royal Dutch Shell will invest 'tens of billions' of dollars in a deal to develop Iraq's supergiant Majnoon oilfield, a Shell executive said on Sunday.

Kraft Foods will convene a meeting on 1 February to urge shareholders to approve a proposal to issue shares and bankroll its hostile bid for Cadbury.

BT Group plans a £1.5bn push to roll out an superfast broadband network in time for the 2012 Olympic games in London, the Financial Times reported on Monday.

The London Stock Exchange is close to agreeing a deal to take control of loss-making trading platform rival Turquoise, The Sunday Telegraph reported, citing sources close to the deal.

Legal & General is exploring the option of relocating its headquarters abroad to avoid the impact of new European Solvency II regulatory measures, The Sunday Telegraph said.

The incoming chief executive of Standard Life, David Nish, has announced that the flotation of HDFC Standard Life, its Indian subsidiary, could be delayed until 2011, The Independent on Sunday said.

B&Q, Britain's largest DIY chain, will launch its biggest sale on Christmas Eve, with investment in the sale expected to be 25% higher than last year at £190m, with the firm hoping that a lacklustre housing market will see an increased interest in home improvement, the Mail on Sunday said.

Ralph Topping, chief executive of William Hill has sparked a fresh clash between the bookmaking and racing industries and online betting exchanges by calling on Sports Minister Gerry Sutcliffe to launch an investigation into exchanges, The Sunday Times said.

VT Group may be unopposed in its bid to takeover Mouchel by two companies previously tipped to be interested in the deal, but Mouchel has refused to meet VT, calling its £380m proposal 'wholly inadequate', The Independent on Sunday said.

There will be updates today from National Express, Cairn Energy, DCD Media and Fulcrum Pharma.