FTSE preview: UK stocks set to fall

By REUTERS
Updated: 02:52 EDT, 31 August 2010

The London market is expected to fall on the open today, following declines overnight on Wall Street and in Asia, with investors concerned about the pace of economic recovery.

The UK blue-chip index looks set to shed 27-35 points, according to financial bookmakers, as traders returned to their desks after the bank holiday Monday.

The FTSE 100 closed up 45.7 points at 5,201.5 on Friday.

US stocks fell yesterday in the year's lightest volumes as worries about the recovery overshadowed data showing a rise in consumer spending and income.

Tokyo stocks fell 3.6% overnight, their worst daily drop in three months, after the Bank of Japan's emergency moves the day before failed to curb the yen's strength and disheartened investors bailed out of the market.

In terms of domestic economic data, British consumer confidence unexpectedly improved in August for the first time since February thanks to a more positive view on the economic outlook, a survey showed.

The GfK/NOP consumer confidence barometer rose to -18 this month from -22 in July, confounding analysts' expectations for a further deterioration to -24.

Investors will also look at July's Bank of England mortgage lending and consumer credit figures, due at 0830 GMT.

UK stocks to watch on Tuesday:

BHP Billiton: BHP Billiton denied speculation on Monday that it planned to sell any of Potash Corp's assets if it succeeds with its $38.6bn hostile bid for the world's largest fertilizer producer.

BP: BP delayed retrieval of the failed blowout preventer atop its ruptured Gulf of Mexico oil well this week because of bad weather, the top US official overseeing the oil spill said on Monday.

Defence companies: The government is reconsidering a £10.5bn plan to purchase air refuelling tankers for the Royal Air Force, the Times said. Under a private finance initiative, the previous government agreed to acquire 14 aircraft from a consortium called Air Tanker, which represents defence companies Rolls-Royce, Babcock, Thales, Cobham and Airbus, the newspaper said.

Royal Dutch Shell: Royal Dutch Shell said on Monday its Nigerian SPDC joint venture was close to completing a new $1.1bn pipeline to the Bonny export terminal which will have a capacity of 600,000 barrels per day.

BT Group: BT has announced plans over the next 18 months to invest an additional £2.5bn in fibre-optic broadband, which will deliver high-speed access to two-thirds of the UK, the Guardian said.

HMV: Shareholders in the retailer have criticised the company for its management of book retailer Waterstone's, the Guardian said. Investors have called for the book chain to be sold if the company's turnaround strategy does not increase returns by this time next year, the newspaper said.

Bunzl: The packaging firm reports first-half results.

Afren: The Africa-focused oil explorer reports first-half results.

Hansteen Holdings: The real estate company reports first-half results.