FTSE preview: Shares lifted by metals and oil

By Reuters
Updated:

 

The FTSE 100 is seen opening up, extending Friday's rally in tandem with pre-weekend gains on Wall Street, with commodity issues set to be lifted by firmer metal and oil prices.

A dealer monitors her screens on the trading floor of IG Index in London

Market watcher: Shares are expected to recover this morning.

The UK blue chip index closed 28.34 points, or 0.5% higher on Friday at 5,896.25, bouncing back following sharp falls on Thursday when the index reached its lowest closing level in five weeks.

On Wall Street, the US blue chip index rose on Friday as General Electric Co's earnings put a positive tone on the economic recovery, snapping a two-day losing streak for the benchmark index.

Asian stocks outside Japan, however, struggled to hold on to early gains on Monday, as investors remained wary.

No British data will be released on Monday, with the main domestic macroeconomic focus for the week to be on the second reading for UK fourth-quarter GDP, due on Tuesday, and on the publication of minutes from January's Bank of England Monetary Policy committee meeting, due Wednesday.

No important data will also be released across the Atlantic on Monday, so investors will be focused on the outcome of the latest two-day Federal Reserve Open Market Committee meeting, due after the London close on Wednesday.

No changes are expected, however, to the US central bank's current monetary policy.

The corporate earnings diary hots up in London later this week, notably on Thursday when blue chip drugmaker AstraZeneca and satellite broadcaster BSkyB both posts results, while resources firms Cairn Energy, Tullow Oil, Kazakhmys, Lonmin, and Vedanta all issue trading updates.

Another swathe of US earnings will also dominate this week, with financial services firm American Express restaurants operator MacDonald's Corp, and chipmaker Texas Instruments among the main companies reporting on Monday.

Britain's banks could face greater strains on their balance sheets under proposals from the Independent Commission on Banking (ICB) set up last year by the British government to make their retail arms safer, analysts said on Sunday.

On Saturday, John Vickers, head of the ICB, said that while the commission was unlikely to support 'narrow' bank models over bigger and more diversified groups, it would nevertheless examine ring-fencing retail bank units from market trading operations.

Barclays is planning a radical pay overhaul as part of a strategic review that could also see the group shed staff, the Financial Times said.

Standard Chartered on Monday said it has agreed to buy GE Money, an auto loan and personal loan specialist in Singapore.

Rio Tinto's $3.9bn bid for Africa-focused coal miner Riversdale gained steam on Monday after a representative of Riversdale's top shareholder Tata Steel backed the offer.

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Shares in the new holding company, International Consolidated Airlines Group, formed by the merger of British Airways and Spain's Iberia will be listed in London and Madrid on Monday.

British Airways' cabin crew voted on Friday to strike again in a long-running battle over proposed job and pay cuts, although no date was announced for any further strikes and the union left the door open to more talks.

Abu Dhabi's Etihad Airways has expressed 'top level interest' in Richard Branson's British airline Virgin Atlantic, the Sunday Times newspaper reported.

The British telecoms firm said on Sunday it had not blocked Essar from conducting an initial public offer of the latter's stake in Vodafone Essar, India's third-largest telecoms company by subscribers.

Also, Vodafone has poached rival 3's only major wholesale telecoms customer dealing a major blow to 3, Britain's smallest network, which has struggled to attract partners, The Daily Telegraph said on Monday.

Shares in Australia's Foster's Group rose more than 4% on Monday following a report that brewer SABMiller may have cleared some operational hurdles it faced if it decided to bid for the brewer's $10bn beer business.

A surge in profits of as much as 25% at the British Gas group Centrica looks set to prompt a Competition Commission investigation into the country's leading energy suppliers, The Times said on Monday.

Serco has pulled out of a $2bn bid for US defence consulting firm SRA International, the Daily Telegraph said on Monday.

Germany's TUI AG may use the proceeds of a planned divestment to buy more shares in Europe's largest tour operator TUI Travel, in which TUI currently owns around 55%, two sources close to the company told Reuters.

Teva Pharmaceutical Industries, the world's largest generic drug maker, has launched court action in London to revoke AstraZeneca's European patent for the Seroquel drug, the Sunday Times reported.

Oberthur Technologies, the French group eyeing British banknote printer De La Rue, has joined forces with private equity firm Bain Capital to lift its bid, a source familiar with the situation told Reuters. However, Bain will only support the deal if it gains approval from De La Rue's board, the source said.

The British food manufacturer Northern Foods has agreed to be taken over by businessman Ranjit Boparan in a deal valuing the business at £342m, the company said on Friday, having withdrawn its support for a takeover by Irish food manufacturer Greencore Group.

Meanwhile, Greencore is considering a cash sweetener to its offer for Northern Foods after its target abandoned talks over a planned merger to back a higher bid by food tycoon Ranjit Boparan, media reported on Monday.

John Lovering is set to step down as chairman of Mitchells & Butlers, a source familiar with the situation told Reuters, a year after taking over following an investor-led board battle.

The industrial x-ray screening firm Image Scan reports full-year results today.

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