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FTSE 100 preview: Ex-divis to knock shares

By Reuters
Updated: 02:53 EDT, 9 February 2011

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The FTSE 100 is expected to dip with investors reluctant to push the index higher after a strong run, and with ex-dividend factors weighing on shares.

Dealers monitor their screens on the trading floor of IG Index in London

Wednesday: Investors will watch trade data for more clues on the economy.

The blue-chip index is seen falling as much as 0.2% after it gained 0.7% on Tuesday, its fifth session of gains in six.

In the United States, the Dow notched a seventh straight day of gains on Tuesday, but light volume suggested that investors don't believe the more than five-month rally has the legs to keep going.

In Asia, equities were mostly lower with the second interest rate rise from China in six weeks tempering appetite for risk.

MSCI's index of Asia Pacific shares outside Japan fell 0.8%, while Japan's Nikkei 225 fell 0.2%.

Investors will watch trade data for more clues on whether the British economy is speedily recovering from recession.

Britain's trade deficit is expected to have improved modestly in December to £4.88bn from £5.03bn the previous month, a view that has been underpinned by reports of robust export demand from manufacturers, helped by the weakness of the pound.

Companies going ex-dividend will be a relatively large factor for British stocks with a clutch of large companies losing their payout attractions.

BP, GlaxoSmithKline, International Power, Royal Dutch Shell, Sage Group and Unilever taking a total of 19.83 points off the index according to Reuters calculations.

Technical analysts pointed to support for the index well above the 6,000 level. 'Bullish traders needn't worry about being on the wrong side of this market unless the swing bottom at 6032.88 is violated,' James A. Hyerczyk, Analyst at Autochartist said.

There will be results today from Reckitt Benckiser, Resolution, CSR, Cable & Wireless, Daily Mail & General Trust, Future, Grainger, and Telecity.

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