FTSE preview: Shares to rise ahead of rates
The FTSE 100 is expected to rise today, rallying after sharp falls in the previous session, with investors awaiting interest rate decisions in Britain and mainland Europe.
Market watcher: Shares should rally today.
The UK blue chip index closed down 98.81 points, or 1.6% on Wednesday at 5,984.07, weighed on by a weaker commodities sector after disappointing US data impacted the demand outlook and knocked investor's risk appetite.
US blue chips shed 0.6% on Wednesday, but ended above session lows, with Asian stocks outside of Japan - which remained shut for a the Golden Week public holidays - modestly lower on Thursday.
A weak outlook for Britain's economy means the Bank of England is expected to keep UK interest rates at a record low of 0.5%, held since March 2009.
The British government looks set to miss its goal to balance the budget by 2015 because the economy will post only sluggish growth as consumers tighten their belts, a leading economic think tank, the National Institute for Economic and Social Research said on Thursday.
The European Central Bank will also unveil its latest interest rate decision on Thursday, although after April's quarter-point rate hike to 1.25% no further change is expected for the time being.
Ahead of the BoE decision, the Markit/CIPS UK April PMI services report will provide another snapshot of the British economy.
Across the Atlantic, first-quarter US productivity and unit labour costs data will be released, together with the latest weekly jobless claims, another pointer towards Friday's key April US April jobs report.
Rio Tinto expects global markets to remain fragile in the near term and sees itself in a strong position to weather any turbulence, its chairman Jan du Plessis said at the group's Australian annual meeting on Thursday.
There will be updates today from Lloyds Banking Group, WM Morrison, Diageo, Vedanta Resources, Randgold Resources, Smith & Nephew, Schroders, Amec, Carphone Warehouse, and Go-Ahead.
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