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FTSE preview: Shares wait on GDP & BP

By Reuters
Updated: 02:59 EDT, 27 April 2011

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The FTSE 100 is seen opening down 4 points, or 0.1%, on Wednesday according to financial bookmakers, consolidating gains made in the previous session ahead of a raft of blue chip results and some important economic news.

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

Wait and see: Sentiment will be set by GDP figures.

The UK blue-chip index closed up 51.06 points, or 0.9% on Tuesday at 6.069.36, ending at its highest level in over two months, albeit on light volumes, boosted by upbeat earnings and strong gains on Wall Street.

US blue chips also ended 0.9% higher on Tuesday, and Asian stocks moved ahead on Wednesday, although weakness in commodity issues was a feature as metal prices eased, a factor which should weigh on blue chips in London.

The preliminary reading for British first-quarter GDP will be released, with 0.5% growth forecast for the quarter, giving an 1.8% year-on-year rise, a modest recovery after a shock 0.5% fall in the fourth quarter of last year which was due in part to harsh winter weather.

"After the surprise contraction in GDP in Q4 2010, the UK now teeters on the edge of a double dip ... traders are concerned that another quarter of negative growth is highly possible as the government's austerity measures began to bite and soaring inflation squeezed incomes," said Jonathan Sudaria, night dealer at Capital Spreads.

Across the Atlantic, March US durable goods orders will be released, together with the March Chicago Midwest survey, but the main focus will be on the latest Federal Reserve interest rate decision, due after the London close, with a press conference from Fed chairman Ben Bernanke scheduled.

Bernanke is expected to paint a cautious picture on the economy's outlook with the Fed's decision expected to reinforce its ultra-easy policy stance.

Ex-dividend factors will knock 5.64 points off the FTSE 100 index on Wednesday, with ARM Holdings, Centrica, Fresnillo, Smith & Nephew, and Tesco all losing their payout attractions.

BP delivers first-quarter results today.

Barclays issues a first-quarter trading update. Also, Barclays and State Street Corp were sued on Tuesday to recover alleged losses on a little-known debt instrument that a Florida credit union says is similar to one that prompted many lawsuits against Goldman Sachs.

GlaxoSmithKline reports first-quarter results and Associated British Foods posts first-half results.

Shareholders in Stobart Group have raised concerns about a deal which would see the distribution company buy a property portfolio from its chief executive, Andrew Tinkler, The Daily Telegraph said.

There will be updates from Aggreko, Arm Holdings, Wolfson Microelectronics, Carpetright, Game Group and Premier Foods.

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