FTSE preview: Profit-taking to hit shares

By Reuters
Updated: 03:03 EDT, 4 April 2011

The FTSE 100 is seen opening lower on Monday, falling back from the previous session's nearly six-week closing high, with heavyweight miners likely to be hurt by weaker metals prices.

Blue Monday: Shares are seen falling back today.

The UK blue chip index looks set to shed 16 to 18 points, or as much as 0.3%, according to financial bookmakers, after it ended up 101.16 points, or 1.7%, at 6,009.92 on Friday, its highest close since February 21 on solid US jobs data.

The index has managed a 1.9% advance on the year, having rallied more than 7% in the past two weeks from its March low of 5,591.59 just after the Japanese earthquake.

Copper prices weakened on Monday on the back of concerns over demand from China, the world's biggest consumer of raw materials.

On the economic front, March UK Markit/CIPS construction PMI data is due.

This week, the domestic spotlight will fall on Thursday's Bank of England interest rate decision for April, with most analysts expecting no change from the present 0.5%.

By contrast, the European Central Bank is expected to raise interest rates when it meets on Thursday. Investors will also look at February UK industrial output figures on Wednesday, and March UK Markit/CIPS services PMI on Tuesday.

The market will have an eye on the crisis in the euro zone, and in particular on developments in Portugal and Ireland.

Retailers could be a focus, with Marks & Spencer set to issue a trading update on Wednesday, following a torrid time for the sector last week after disappointing news from companies including Dixons and Mothercare.

Across the Atlantic, the US March employment index is scheduled for release. Highlights later in the week include the US March ISM non-manufacturing index on Tuesday.

Vivendi has struck a deal to buy Vodafone's 44% stake in France's second-biggest telecom operator SFR for €7.75bn, giving it full control of its most lucrative unit.

Four Russian oligarchs will make a renewed attempt to block the oil major's proposed $16bn share-swap deal with Rosneft, saying it contravened an existing shareholder agreement, the Daily Telegraph said.

Also, BP will resume drilling in the Gulf of Mexico in July, less than 15 months after an oil spill disaster that killed 11 workers, the Financial Times said.

India's top economic policy panel is expected to take a decision on Wednesday on a long pending approval for Cairn Energy deal to sell a stake in its Indian unit to Vedanta Resources, the Economic Times reported.

French officials are trying to persuade HSBC to move its headquarters to Paris as the bank looks at its domicile arrangements as part in its triennial review, the Daily Telegraph said.

Aluminium group Chinalco considers Rio Tinto a key strategic partner in its drive to expand overseas and has no plans to sell down its shares in the miner, according the Chinese group's chairman, the Financial Times said.

A tropical low off Australia's northwest coast may develop into a cyclone off the coast of the Pilbara iron ore district by mid-week, the Bureau of Meteorology said, potentially disrupting mining and shutting down oil and gas platforms.

Centrica said it was reviewing a planned £700m investment in the North Sea following the windfall tax announced in the UK Budget in March.

SABMiller is considering a bid for Schincariol, Brazil's second-largest brewer, which has been put up for sale for about $2bn, the Sunday Times said without citing sources.

China's state planning agency has told the consumer giant to delay its plans to raise its prices in April as the government pursues its battle against rising inflation, the Financial Times reported.

There will be results today from Dods, Graphite Enterprise Trust, Hyder Consulting, Nanoco Group, XP Power.