FTSE 100 preview: Buffett boost for shares

By Reuters
Updated:

 

The FTSE 100 is seen gaining on Tuesday, tracking strength on Wall Street which was supported by optimistic remarks from veteran investor Warren Buffet, while Asian stocks rose as Chinese inflation fears eased.

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

Eye on the market: Shares are expected to make up for ground lost yesterday.

The blue chip index is seen rising around 0.3% by financial bookmakers after it inched 0.1% lower on Monday to close at 5,994.01, dented by weakness from HSBC after disappointing results.

Chinese manufacturing growth slowed in February, according to an official survey, as the government's sustained campaign to tame inflation weighed on industrial activity. This helped dampen fears about the economy overheating and the need for further monetary tightening in the world's most populous country.

Buffett, chairman of Berkshire Hathaway, told shareholders in his widely read annual letter that he saw the need for 'major acquisitions', a sign stocks may be cheap.

Investors will watch a testimony by Federal Reserve Chairman Ben Bernanke on Tuesday before the Senate Banking Committee.

He is expected to remain cautious about the economy, despite recent data pointing to improvement, signalling the central bank is unlikely to cut short its $600bn stimulus plan.

Back in Britain, investors will watch Nationwide house price data and manufacturing PMI, mortgage lending and money supply data for more clues on the outlook for the struggling British economy.

Oil rose above $112 per barrel, on worries about continues unrest in the Middle East which should support energy stocks, but will act as a brake on general investor confidence as the high price of energy is seen as a drag on growth.

3i, the private equity firm, is targeting April, before Easter, for a flotation of German industrial hose and clamp maker Norma Group, several persons familiar with the plans said on Monday.

There will be results from Fresnillo, Cookson Group, Rotork, Elementis, GKN, Jardine Lloyd Thompson, Lavendon Group, Meggitt, Moneysupermarket.com, Provident Financial, Persimmon, Ricardo, United Business Media and Xchanging.

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