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FTSE preview: Shares wait for US news

By Reuters
Updated: 03:08 EDT, 17 February 2011

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The FTSE 100 index is seen opening unchanged to 3 points lower, or 0.1% on Thursday, according to financial bookmakers, pausing after strong gains on Wednesday as investors await another batch of corporate earnings and US inflation data.

People walk past London's Stock Exchange

Taking stock: Investors will wait for US ad corporate news.

The UK blue chip index closed up 48.19 points, or 0.8% on Wednesday at 6,085.27, having reached an intraday peak for the year of 6,095.76, lifted by gains in banks on hopes for upbeat sector earnings.

US stocks rose to fresh 32-month highs on Wednesday, with the S&P 500 double the level it was two years ago, as from earnings from personal computer maker Dell and deal announcements appealed to investors.

Asian stock markets rose on Thursday, also buoyed by strong corporate earnings, and after the Federal Reserve expressed cautious optimism about the strength of the US economic recovery.

Minutes of the Fed's Jan 25-26 policy session on Wednesday showed officials were more confident of economic recovery, though the job market recovery remained a concern.

On the domestic macroeconomic front, after key British inflation and unemployment reports in the past two sessions, the February CBI industrial trends survey is the only domestic data due on Thursday.

US inflation numbers will be the main focus for investors, with January CPI seen increasing to up 1.7% year-on-year, after being up 1.5% in December.

US initial weekly jobless claims, February's Philly Fed index, and January lead indicators will also be released on Thursday. Technical analysis of the FTSE 100 index remained cautious.

'Now that the FTSE has posted a new weekly high, last week's close at 6,062.90 becomes very important. Holding above this level will sustain the rally while a close below this price on Friday will indicate a significant shift in investor sentiment,' said James A. Hyerczyk, analyst at Autochartist.

Indian refiner Essar Oil is set to buy Royal Dutch Shell's Stanlow refinery in the United Kingdom for about $350m to $400m, two sources with direct knowledge of the development told Reuters.

Essar group is controlled by Indian billionaire brothers Shashi and Ravi Ruia, who also run London-listed Essar Energy.

Tongling Nonferrous, a major Chinese copper smelter, said it had reached an agreement with BHP Billiton on raising the treatment and refining charges for the first half of 2011 by 54.8%.

Barclays is shutting down its retail banking operation in Russia just three years after spending more than £450m on a local bank it hoped would give it a platform for growth, The Daily Telegraph said.

Tesco is set to outpace sales growth at major global rivals, driven by its expansion in Asia, according to international food and grocery analyst IGD.

Diageo and France's Pernod Ricard are vying to buy the $10bn spirits business of US listed Fortune Brands in what will become one of the biggest consolidating moves in the drinks industry, The Daily Telegraph said.

Rebels in eastern Congo have freed a South African man working for British oil firm Soco International, the United Nations said Thursday.

There will be updates today from Kingfisher, BAE Systems, Reed Elsevier, C&W Worldwide, Ladbrokes, Redrow, Dunelm, Sports Direct, Halma, Rathbone Brothers, and Town Centre Securites.

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