FTSE 100 preview: Shares to fall on mixed US news

By REUTERS
Updated: 03:09 EDT, 22 October 2009

The FTSE 100 index is seen opening 58-66 points, or as much as 1.3% lower on Thursday, according to financial bookmakers, tracking a late reversal overnight on Wall Street and falls in Asia as the earnings roller-coaster ride continued across the Atlantic.

Taking stock: Shares will follow Wall St lower.

The British blue-chip index closed 14.45 points, or 0.3% higher on Wednesday at 5,257.85 having fallen as low as 5,174.48 earlier in the day, recovering late on as Wall Street posted early gains.

US stocks, however, ended lower knocked by a late sell-off in financial issues, after an influential bank analyst recommended selling Wells Fargo shares, and as a wider-than-expected loss from Boeing disappointed investors.

After-hours US earnings news also disappointed, with online auctioneer Ebay forecasting fourth-quarter results at the low end of expectations when posting in-line third-quarter numbers.

Asian shares fell on Thursday also impacted by disappointment that Chinese growth data, though robust, offered few surprises.

News that China's economy surged 8.9% in the third quarter, and retail sales and other indicators were robust in September, reinforced optimism Asia was on a sustainable recovery path.

But the outcome was widely expected, giving investors little to trade on. The main domestic macro focus will be on September British retail sales numbers, with a 0.5% rise expected on the month, after a flat reading in August, giving a year-on-year increase of 2.8%, up from 2.1% in the previous month.

Across the Atlantic, September US leading indicators and the latest initial weekly jobless numbers will be eyed later in the session.

A proposed iron-ore joint venture between BHP Billiton and rival Rio Tinto was on track, BHP's outgoing Chairman Don Argus told reporters after a business lunch on Thursday.

A large restructuring effort is to follow a lengthy review of Aviva's 12 businesses on the European mainland by Aviva Europe's chief executive, Andrea Moneta, the Financial Times reported.

Lloyds Banking Group is planning to launch a rights issue and refinancing next week, provided the bank can persuade regulators and the government to agree to a deal before the weekend, the Financial Times said.

Oshkosh Corp's winning bid for a potential $3.5bn US Army medium-sized truck contract was about 10% lower than rival BAE Systems' 'very aggressive' bid, BAE said Wednesday, explaining a third formal challenge to the award they filed on Friday.

National Express is expected to reveal disappointing figures for its third-quarter trading on Thursday, as the company faces a takeover bid from its contemporary Stagecoach, the Daily Telegraph said.

Primark, Associated British Food's fashion retail business, is in negotiations to sign up for a 10,000 sq ft outlet in St David's 2, a massive £675m extension to Cardiff's existing shopping centre, The Independent said.

HMV will open a three-screen cinema on the second floor of its Wimbledon store on Friday in a move designed to offset declining sales of CDs and stalled DVD growth, The Times says.

Paragon is planning to acquire loan books from financial institutions struggling in the financial crisis and, according to chief executive Nigel Terrington, the lender to private landlords will consider businesses ranging from 'tens of millions to hundreds of millions of pounds', The Times said.

There will be results today from Debenhams, Stobart, Smiths News, and Luminar, with updates from Petrofac, Redstone and Dragon Oil.