FTSE 100 preview: Shares up; BP reports

By Reuters
Updated: 03:05 EDT, 1 February 2011

The FTSE 100 index is seen opening up 24-30 points or 0.5% higher on Tuesday, supported by gains overnight on Wall Street and in Asia according to financial bookmakers, rebounding after three sessions of declines.

Market watcher: Shares enjoyed mixed fortunes after Egypt uncertainty.

The UK blue chip index closed 18.43 points, or 0.3% lower on Monday at 5,862.94 as worries over the impact of the political unrest in Egypt sapped investors' risk appetite, particularly for banks and travel firms.

Losses were limited, however, by gains from heavyweight energy issues, as the crude price firmed, and after solid results from US oil major Exxon Mobil, and by strength in miners, helped by merger activity in the US.

US blue chips gained 0.6% on Monday, and Asian stocks rose on Tuesday, led by shares of resource companies, as strong US factory data and surging commodities prices offset fears that the unrest in Egypt could spread to other parts of the Middle East.

Shanghai copper hit its highest in nearly four years on Tuesday supported by the healthy US factory activity numbers and positive data from China.

HSBC's China Purchasing Managers Index reported a rise in January showing solid growth in the country's vast manufacturing sector after factories took in more new orders, while input prices dipped in a tentative sign of receding inflation worries.

On the domestic data front, Bank of England consumer credit and mortgage lending numbers for December will both be released.

And across the Atlantic, January's US ISM manufacturing report and December construction spending data will be released.

Technical analysis of the FTSE 100 index was positive for the short-term.

'Although a broad-based top has been formed along with a sentiment shift to the sell side, the FTSE may have to mount one more attempt at a new high in order for the shorts to reapply their pressure,' said Enis Mehmet, analyst at Autochartist.

'This scenario supports the start of a strong short-covering rally into 5,952.97 to 5,985.42 before fresh selling pressure drives the index lower.'

BP delivers fourth-quarter results today.

Indian mobile phone operator Essar is downplaying plans to inject part of its 33% stake in the Vodafone Essar venture into a listed shell company after objections by its partner Vodafone, according to people familiar with the situation.

Xstrata's Xustralian copper unit on Tuesday activated preliminary emergency procedures in case it needs to evacuate staff as a powerful cyclone heads for northeastern Australia, the company said.

Rio Tinto has shut its Hail Creek coal mine in Australia's Queensland state ahead of a massive cyclone expected to hit on Wednesday or early Thursday.

Home Retail Group gained on Monday on revived trader talk that US giant Walmart might launch a £2.37bn bid for the Argos to Homebase store chains group, the Daily Mail market report said.

Sainsbury gained on Monday on renewed talk that the Qatar Investment Authority may launch a takeover approach, the Daily Mail market report said.

There will be updates today from Arm Holdings, Autonomy, Pennon, Northumbrian Water, Ocado, NWF and Numis.

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