FTSE 100 preview: Commodities fuel rises

By Reuters
Updated: 02:54 EDT, 11 October 2010

The FTSE 100 is seen opening higher today, tracking share market gains made in Asia and on Wall Street since Friday's close, with commodity issues likely to provide the main support for equities.

New week: Traders will look to US for clues on shares.

The UK blue chip index closed 4.52 points or 0.1% lower on Friday at 5,657.61, having gained 1.2% in total last week, weighed down by weaker banks after a surprise drop in US non-farm payrolls, although the data raised quantitative easing hopes, lifting commodity prices and heavyweight miners.

The dollar slid to a 15-year low against the yen and Asian stocks rose on Monday on hopes for easier US monetary policy, and after IMF and G7 meetings produced no quick fix for global economic imbalances.

The British government is wasting money by failing to take advantage of its size and credit rating to get the best deals from its suppliers, billionaire retail tycoon Philip Green said on Monday in a government-commissioned report.

No important domestic economic indicators will be released on Monday, but key inflation, unemployment, and trade figures will provide further clues as to the health of the British economy later in the week.

Across the Atlantic, US markets will be closed for the Columbus Day public holiday on Monday but, after Friday's disappointing jobs report, it will be another busy week for US economic data, culminating in September inflation and retail sales numbers on Friday.

It will also be a busy week for US corporate earnings as the third-quarter reporting season gets properly underway, with figures due amongst others from Intel on Tuesday, JP Morgan Chase on Wednesday, Google on Thursday, and General Electric on Friday.

Crispin Odey, the hedge fund manager who made a 28% return on the back of Barclays has said Lloyds Banking Group is a better investment because of the bank's focus on traditional services, like mortgages, The Daily Telegraph said on Monday.

Canada's Ontario Teachers Pension Fund has approached Singapore's Temasek in a search for consortium partners that could bid for Potash Corp, the fertiliser producer that is the subject of a $39bn hostile bid by BHP Billiton, The Sunday Times said.

Meanwhile, The Sunday Telegraph reported that bankers to Potash Corp are working on a potential break-up plan to fend off BHP's bid.

BP is in talks with China's third-largest oil company, CNOOC, over the sale of its Argentinian business for £6.3bn, the Mail on Sunday said.

Also, BP plans to scrap the external safety ombudsman it set up after a fatal explosion in its Texas City refinery in 2005 despite a growing number of concerns by the company's employees, The Guardian said on Monday.

Royal Dutch Shell is offering to spend 'tens and tens of millions of dollars' building an oil spill containment system for Arctic conditions if the US government permits it to drill offshore Alaska, the Financial Times said.

British Airways's chief executive Willie Walsh has said the government's air passenger duty tax is a 'disgrace' that will have a big impact on the economies on Britain and developing countries, The Guardian said on Monday.

Vince Cable must be bold and 'break Murdoch's stranglehold', The Observer said, seeing enough concern about the deal to trigger a reference to Ofcom, which will likely say that the merger threatens the diversity of Britain's media, at which point the issue will revert to the business secretary who may refer it to the Competition Commission.

Vodafone is launching a £10m campaign to compete for pay-as-you-go customers as it strives to turn round its business after falling to the number-three spot among Britain's mobile operators, the Financial Times said on Monday.

There will be updates today from Ladbrokes, John Wood Group, Travis Perkins, Nautical Petroleum and E2V Technologies.