FTSE 100 preview: Shares down after high

 

The FTSE 100 is seen edging lower on Monday, retreating after hitting a 29-month closing high on Friday following surprisingly strong US jobs data that reinforced optimism about the economy.

Dealers monitor their screens on the trading floor of IG Index in London

Blue Monday: Shares are seen opening lower today.

The UK blue chip index looks set to fall 7 to 8 points, or 0.1%, according to financial bookmakers, after it closed 12.56 points, or 0.2%, higher at 5,875.35 on Friday.

In a quiet week in terms of domestic economic data, with nothing significant scheduled for release on Monday, investors were looking ahead to October RICS house price data on Tuesday along with September trade balance figures, September industrial production data, and September manufacturing output numbers.

The Bank of England quarterly inflation report will be published on Wednesday.

US stocks rose for the fifth straight week as investors took heart from Republican gains in the elections and on news that more cheap money from the Federal Reserve was on the way. But investors locked in some profits on Friday, offsetting a robust payrolls report. The US market closed slightly higher.

'Despite the better than expected payrolls figures on Friday from the US, any optimism seems to have been short-lived and replaced with caution,' Jonathan Sudaria, a dealer at Capital Spreads, wrote in a note.

'Questions about how sustainable US job growth will be going forward and the fact that the unemployment rate remained at... 9.6% for a third month, dampened the effect of the headline figure,' he wrote.

No major US data is due on Monday. Investors will look at US September wholesale inventories on Tuesday, US weekly jobless claims on Wednesday as well as US October import and export prices, with November preliminary Reuters/University of Michigan consumer confidence figures out on Friday.

Standard Chartered said investors representing 98.5% of its shares signed up for its $5.3bn rights issue, which will boost the Asia-focused bank's capital ahead of tougher global rules.

HSBC and JP Morgan have been accused of 'intentionally and unlawfully' supressing the price of silver futures traded on New York's Comex stock exchange after a Goldman Sachs employee in London blew the whistle, the Daily Telegraph said.

Some of the biggest trade finance providers, led by HSBC and Standard Chartered, are lobbying to have tough new capital rules toned down, saying world trade could be severely hampered, the Financial Times said.

Britain's business secretary is to intervene on behalf of drinks group Diageo to smooth its £700m acquisition of China's Shui Jing Fang, he was quoted as saying in the Daily Telegraph.

Tesco and Singapore's Dairy Farm are among those to submit second-round bids for French retailer Carrefour's Southeast Asian assets, sources familiar with the matter told Reuters.

The Eurofighter consortium, made up of Britain, Germany, Spain and Italy, and which includes BAE Systems, is leading the race to win a £7bn deal to supply 126 Typhoon fighter jets to the Indian Air Force, the Sunday Telegraph reported.

Reader service: Free brochure guides

Completely free insider guides on the latest investing trends...

sterling stacked on a financial chart

The Typhoon, produced by Britain's BAE Systems, Italy's Finmeccanica and pan-European aerospace firm EADS, topped the Indian Air Force's technical assessment of bids, beating the American F16 and F18s, Russian MiG 35 and France's Dassault Rafale, the report said.

Australia's Qantas Airways has grounded its A380 fleet for at least another three days as it investigates oil leaks as a possible cause of the explosion which tore apart one of the superjumbo's engines last week.

The airline said its six Airbus A380 aircraft would be grounded for at least another 72 hours after an investigation found oil leaks on three Rolls-Royce engines which have been removed from the planes.

Serco has admitted that two of its biggest suppliers gave in to aggressive pressure for rebates within days of receiving its demand for the return of past payments, the Guardian said.

There will be updates today from Inmarsat, G4S, Lanashire Holdings and Spirax-Sarco Engineering.