FTSE 100 preview: Miners to lead rally

By Reuters
Updated: 02:56 EDT, 28 October 2010

The FTSE 100 is seen gaining 37-38 points at open on Thursday, following strength in Asia as a retreat in the dollar lifted metals prices, which is likely to support miners.

Market watcher: Traders will watch house prices and US policymakers today.

The blue-chip index is seen gaining as much as 0.7% after it fell 1.1% on Wednesday to close at 5,646.02.

The MSCI index of Asia Pacific stocks outside Japan rose 0.8%, having slid nearly 2% on Tuesday - its biggest one-day percentage fall since late June. Still, it remained close to a 28-month high hit last week.

Domestically investors will watch Nationwide house price data clues on the state of the UK economy. House prices are forecast to have fallen 0.4% in October, and 2.3% on the year.

Analysts expect markets to remain choppy in the run up to the US FOMC policy-setting meeting.

The latest Reuters survey showed most leading economists expect the Federal Reserve to buy between $80bn and $100bn worth of assets per month, with estimates for how much it will eventually spend varying from $250bn to $2 trillion.

In a similar Reuters poll of primary dealers on 8 October, dealers mostly forecast the total size of the new programme at $500bn to $1.5 trillion.

Market participants have begun to scale back expectations of the Fed's intentions. The Wall Street Journal said on Wednesday the Fed is likely to unveil an asset-purchase programme worth a few hundred billion dollars over several months.

Government spending cuts announced last week will deliver a 'material' hit to economic growth over the next two years, a Bank of England policymaker was quoted as saying on Thursday.

In an interview with Britain's Times newspaper, Posen said the economy remained weak and reiterated arguments in favour of extra quantitative easing.

Anglo American's chief executive Cynthia Carroll said on Wednesday the global miner has a project pipeline that could amount to $50bn across a wide range of minerals.

JPMorgan Chase & Co and HSBC Holdings were hit with two lawsuits on Wednesday by investors who accused them of conspiring to drive down silver prices, and reaping an estimated hundreds of millions of dollars of illegal profits.

Man Group is planning to cut as many as 200 jobs over the next six months, the Wall Street Journal said, citing a person familiar with the matter.

There will be results today from Astrazeneca, Cairn Energy, Kazakhmys, Aggreko, Axis-Shield, Mouchel, Premier Foods and TT Electronics.