FTSE preview: Shares hit by US jobs woe

 

The FTSE 100 is seen falling on Monday in tandem with declines on Wall Street and in Asia after a weak US jobs report stoked concerns that the world's biggest economy was slowing.

City trader traders stock exchange market

Monday: Shares have been hit by poor US jobs figures.

The UK blue-chip index looks set to shed 2 to 16 points, or up to 0.3%, according to financial bookmakers.

On Friday the FTSE 100, bruised by concerns over the global economy in the previous two sessions, rebounded from lows following the poor US jobs numbers to close marginally higher.

The UK benchmark index ended up 7.09 points, or 0.1%, at 5,855.01 on Friday, having dropped around 140 points over the course of Wednesday and Thursday, pressured by gloomy US data.

Some technical analysts were relatively bearish about the FTSE 100's progress.

'Since topping at 6,103.73 on May 3, the FTSE has embarked on a series of lower-tops and lower bottoms, turning the short-term trend to down and setting up the market for possibly an even sharper break,' James Hyerczyk, analyst at Autochartist, said.

He said that, based on the March 15 bottom at 5,591.59 to the top at 6,103.73 in May, expectations were for a minimum break into a retracement zone at 5,847.66 to 5,787.23.

'Currently the index is trading inside this zone without attracting a lot of buyers. It seems the only upside action has been caused by short-covering. This is another sign of weakness.'

US blue chips fell 0.8% on Friday after the government's payrolls report showed 54,000 jobs added in May, the weakest reading since September, with Japan's Nikkei average down 1.1% on Monday.

Markets in China, Hong Kong, Taiwan and South Korea were closed for a long holiday weekend.

No major domestic economic data is out on Monday, and for the rest of the week there will just be the Bank of England's interest rate decision, trade balance figures, industrial output numbers and PPI data.

Across the Atlantic, investors will look at the US May employment index on Monday, in what is a similarly quiet week in terms of economic data.

Several leading drugmakers are cutting their prices on potentially life-saving vaccines for people in developing countries in an effort to sustain supplies via the GAVI international vaccine alliance.

The price cuts, offered by both generic and branded drugmakers including GlaxoSmithKline, Merck, Johnson & Johnson's Crucell and Sanofi-Aventis' Sanofi Pasteur, should help the alliance narrow a $3.7bn funding gap for its commitments up until 2015.

East African Breweries Ltd has agreed to buy a 20% stake in its Kenyan unit from SABMiller's Africa unit for 19.53bn shillings ($225m), EABL said on Monday.

Britain's big energy companies have agreed to co-operate with a market investigation by the energy regulator Ofgem, possibly avoiding the prospect of a inquiry by the Competition Commission, the Times said.

European airlines have warned of a trade war with the United States, Russia and China if the European Union pushes ahead with plans to include international carriers in the emissions trading scheme next year, the Guardian said.

Rolls-Royce is set to build a new engine to beef up the A350 jetliner being developed by Airbus in a costly rethink of strategy for Europe's most ambitious new plane project, industry sources said on Monday.

Internet companies should have to comply with national laws on privacy and consumer protection, Vodafone chief executive Vittorio Colao said, according to the Financial Times.

Aviva is poised to name John McFarlane as its next chairman, officially replacing Colin Sharman early next year, the Daily Telegraph said.

Industrial unrest sweeping through the public sector could spread to National Grid as thousands of workers end voting this week on a below-inflation pay offer from the electricity and gas firm, the Times said.

Aegis is in talks to sell its market research business Synovate to Ipsos Group in a deal that could be worth £500m, the Daily Telegraph said.

Southern Cross is to shed nearly a quarter of its homes, the Sunday Telegraph said.

There will be results today from E2V Technologies, Eckoh, UBC Media and Workspace Group, with traffic figures coming from Easyjet.