FTSE preview: Gains ahead of US job figures

By Reuters
Updated: 02:49 EDT, 1 April 2011

The FTSE 100 is forecast to open up 15 to 24 points, with investors optimistic that key US jobs data will point to an improving economic outlook, though eurozone debt concerns will be a counterweight.

Friday feeling: Traders will be eyeing key US jobs data

The blue-chip index is expected to recover some of the losses it saw in the auction period after markets closed on Thursday, when traders sold heavily in immediate response to the detail on Irish bank stress tests.

It closed 49.54 points lower at 5,908.76, down after six days of straight gains.

Ireland's central bank said on Thursday fresh stress tests showed the country's four remaining lenders needed to recapitalise to the tune of €24bn (£21bn), putting a €70bn (£62m) total price on protecting its banks from future shocks.

The size of the capitalisation was in line with expectations, but traders sold banks heavily in immediate response.

The European Central Bank (ECB) offered a compromise funding solution for Irish lenders but its proposal fell short of a formal medium-term funding facility that would have gold-plated Dublin's big bang announcement.

But the main focus will be non-farm payroll jobs data for March. Jobs are forecast to have increased 190,000 after gaining 192,000 in February.

'This will be the second month of significant gains for the US economy and there are expectations that this could be the start of a prolonged trend in the US labour market,' said Jonathan Sudaria, night dealer at London Capital Group.

Back in the UK, manufacturing PMI data for March is due for release. It is forecast at 60.6, down a little from the previous month but still high.

Economists say decent domestic and overseas orders mean manufacturing activity is likely to continue the robust expansion seen in February, when the survey recorded its highest reading since it started in 1992.

Stocks to watch today include:

Xstrata: The miner and Chugoku Electric have settled an annual coal contract for the Japanese fiscal year starting April 1 at a record level of around $130 per tonne, over 30% higher than last year's contract, sources told Reuters on Friday.

Prudential: The insurer has deferred part of its chief executive's bonus for three years in a move likely to appease institutional shareholders following the collapse of its takeover of AIA last year, the Daily Telegraph said.

Separately, Prudential disclosed that Michael McLintock, head of M&G, was paid £8.4m in 2010, more than any boardroom director, the Guardian said.

Future Group: The publishing group releases a trading update.