FTSE 100 preview: Shares up; Metals gain

By Reuters
Updated: 02:48 EDT, 15 October 2010

The FTSE 100 is expected to open slightly higher today after falls in the previous session with commodity issues expected to provide some support as metal prices and crude hold steady.

Friday feeling: How will shares finish the week?

The blue-chip index closed 20.14 points, or 0.4%, lower on Thursday at 5,727.21, having ended at its highest closing level since late April on Wednesday, with banks dragged down by worries about possible cash raisings.

"The rally's pause seen in the Thursday session could simply be a reaction to the strong rally on Wednesday and profit-taking in front of 5,800," said Raghee Horner, Autochartist's chief market analyst.

'A break higher through the resistance at 5,738.50 could signal a push from buyers and a willingness to retest the ceiling at 5,790 to 5,800. Near-term support is just above the 5,700 level at 5,712,' Horner added.

US blue chips ended flat on Thursday while broader indices fell, with Asia equities also lower on Friday and the dollar steady ahead of a speech by US Federal Reserve chairman Ben Bernanke.

Bernanke could provide clues on the Fed's next policy steps in a speech on Friday exploring central bank options when inflation is low.

Financial markets, which widely expect the US central bank to begin a new program of buying longer-term US Treasury securities at its 2 November meeting, will look for clues about the scope of the programme.

Ahead of that speech, no domestic economic data were scheduled but there will be a welter of US pointers to digest, including September consumer prices and retail sales numbers, and October's Empire State Index and University of Michigan consumer sentiment indexes.

US CPI was expected to be up 0.2% on the month and 1.2% higher year-on-year, after a 0.3% increase in August, with retail sales seen up 0.4% on the month, unchanged from August's rise.

Tech issues could get a boost from Google which, after Wall Street's close, posted above-forecast third-quarter results.

HSBC could drop out from an $8bn bid for South Africa's Nedbank, which is majority owned by Old Mutual, and which could pave the way for rival Standard Chartered to get back into the auction, The Financial Times said.

BHP Billiton and Rio Tinto are expected to pursue last-ditch talks with regulators in a bid to save a proposed $116bn iron ore joint venture after the project suffered a new blow on Thursday when Germany said it would ban the planned merger of the miners' Western Australian iron ore operations.

Royal Dutch Shell has agreed to sell its Panamanian assets to local group Petroleos Delta to reduce its retail presence as part of its global strategy, Delta said on Thursday.

Also, Panalpina Group and its customer, Royal Dutch Shell, are close to settling foreign bribery charges by US regulators, according to a Wall Street Journal report on its website on Thursday.

BAE Systems is looking at acquisitions to expand in three core areas: intelligence and cyber security; readiness and sustainment of existing weapons systems; and electronic systems; Linda Hudson, chief executive of the company's US unit, told Reuters in an interview on Wednesday.

The chief executive of F&C Asset Management has warned activist shareholder Edward Bramson that he would jeopardise £14bn worth of business if he increases his stake in the company, The Times said.

Qatar's QInvest, Panmure Gordon's biggest shareholder, is considering a possible sale of its 44 percent stake in the stockbroker, The Daily Telegraph said.

G4S said it was in talks with a British police force to operate what it said would be the country's first totally privately run police cells.

There will be updates today from United Business Media, Computacenter, Chrysalis and Eaga Group.