FTSE preview: Shares up on commodity gains

By Reuters
Updated: 03:02 EDT, 11 May 2011

The FTSE 100 is expected to rise with firmer commodity prices set to support heavyweight miners and energy stocks.

Eye on the market: Traders will watch for clues on interest rates.

The blue-chip index was seen gaining around 0.2% after rising 1.3% on Tuesday to close at 6,018.89, its highest level in a week.

Asian and US stocks gained as fears about weaker growth and the Greek debt crisis faded and as commodity prices recovered some of last week's sharp falls.

The Bank of England's closely watched quarterly inflation report containing its latest growth and inflation forecasts is duefollowed by a news conference with governor Mervyn King.

The report may trigger markets to bring forward bets on when the BoE will raise interest rates, despite only minor revisions to economic forecasts contained within it. Currently, a rate rise from a record low of 0.5% is not fully priced in until February.

Figures on Britain's trade balance will also be eyed for clues as to the state of the economy. The deficit has probably widened again in March with the global goods trade deficit forecast at £7.25bn, compared with £6.78bn in February.

British permanent staff appointments via recruitment agencies picked up last month, as did wages, but the rise in hiring confidence was confined to the private sector, a survey suggested on Wednesday. US trade and mortgage data will also be in focus.

Ex-dividend factors will knock 12.02 points off the FTSE 100 index. BP, Inmarsat, Morrison Supermarkets, Randgold Resources, Rexam, Royal Dutch Shell, Sage, Unilever and Whitbread are all losing their payout attractions.

HSBC's biggest bank is looking to slash up to $3.5bn in costs by cutting the scale of its wealth management and retail banking businesses, it said on Wednesday. It said that it has appointed Richard Bennett as group managing director, reporting to Chief Executive Stuart Gulliver.

BHP Billiton said on Tuesday it will move the head office of its diamonds and specialty products unit to Saskatchewan, a move that ties in with the Anglo-Australian miner's plans to develop the world's largest potash mine in the Western Canadian province.

TMX Group will file applications within the next few weeks with Canadian provincial securities regulators seeking approval of a takeover bid from London Stock Exchange, TMX Chief Executive Tom Kloet said on Tuesday.

Press reports cited rumours of takeover interest for Sage, with SAP, mentioned as a bidder at 450p a share or £6bn.

There will be results today from J Sainsbury, FirstGroup and Greggs, while there will be updates from Prudential, John Wood Group, Barratt Developments, Bovis Homes, and Drax Group.