FTSE preview: Shares up on Greek deal
The FTSE 100 index is seen opening higher after the long weekend reflecting strong showings overnight in Asia that were helped by hopes for Greek aid.
Market watcher: Shares should rise today.
The UK blue-chip index closed up 57.88 points, or 1%, on Friday at 5,938.87, bolstered by gains in miners and banks in a broad-based rally.
US markets were also closed on Monday for the Memorial day holiday, with US blue chips having finished 0.3% higher on Friday in light volume led by basic materials as a weak dollar lifted metal prices.
Asian equities pushed higher on Tuesday as sentiment was boosted by a report saying Germany was considering making concessions to facilitate a new aid package for Greece, easing concerns over euro zone debt.
The Wall Street Journal's online edition said Berlin's concession that it must lend Greece more money would help Europe overcome its impasse over Greece's funding needs before the indebted country runs out of cash in mid-July.
European Union officials said on Monday the EU was racing to draft a second bailout package for Greece to release vital loans and avert the risk of the euro zone country defaulting.
On the domestic macroeconomic front, The British Chambers of Commerce (BCC) cut its UK growth forecasts for this and next year on Monday, pointing to the impact of the government's tough fiscal policy and high inflation on consumers' ability to spend.
The BCC reduced its forecast for UK gross domestic product (GDP) growth in 2011 to 1.3% from a previous prediction in March of 1.4%. It reduced its forecast for 2012 to 2.2% from 2.3%.
Meanwhile, house prices in England and Wales dropped at their fastest annual pace in over one-and-a-half in May as demand fell for the first time since January, a survey by property research company Hometrack showed on Monday.
No major UK economic data will be released on Tuesday, with little due all week aside from a trio of Markit/CIPS surveys, and Bank of England mortgage lending data.
Investors' main focus will be on the May US jobs report, due on Friday, with forecasts currently for a 180,000 increase in non-farm payrolls, after a 244,000 rise in April, with the unemployment rate seen at 8.9%, down from 9.0%.
Ahead of that data, the May ISM New York report will be released with May Chicago PMIs due and the latest US consumer confidence data also scheduled.
Technical analysis for the FTSE 100 index remained cautious. 'Despite the strong pre-holiday rally in the FTSE 100, the sideways trading action under thin trading conditions indicates impending volatility. The failure to breakout to the upside, coupled by a developing double-top suggests a growing bias to the downside,' said Enis Mehmet, analyst at Autochartist.
Wolseley has put three of its British businesses on the market in a sale expected to rake in about £300m, the Sunday Times reported.
Barclays would consider buying one of Spain's troubled regional savings banks, or cajas, as long as the Spanish government agrees to offer the British bank guarantees, the Sunday Times reported.
Britain could start selling its 83% stake in Royal Bank of Scotland next year, RBS Asia Pacific Chief Executive John McCormick told Reuters on Monday at an event to mark the launch of its joint venture brokerage in China.
Lloyds Banking Group is considering reforms to the structure of bonus payments for its investment bankers and executives to deter them from taking unnecessary risks, The Daily Telegraph said on Tuesday.
The fund BP set up to deal with compensation claims after 2010's Gulf of Mexico oil spill is starting to wind down after paying out around $4bn of the $20bn set aside by the oil firm, the Sunday Telegraph reported.
Novae Group and Omega Insurance have held preliminary talks about creating a £500m group as the move towards consolidation among Lloyd's of London insurers gathers pace, The Daily Telegraph said on Monday.
Debenhams is in talks with US retailer Sears about opening concession or franchise areas in Sears outlets across the United States, The Daily Telegraph said on Tuesday.
The London Stock Exchange said on Sunday it is not in talks with LCH.Clearnet, following speculation that it had been one of a number of exchanges that had made a bid for the European clearinghouse.
Germany plans to shut all nuclear reactors by 2022, Chancellor Angela Merkel's ruling coalition announced on Monday, in a policy reversal drawn up in a rush after the Fukushima disaster in Japan.
There will be results today from Datong and Majedie Investments.
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