FTSE preview: Shares up; jobs data due

By Reuters
Updated: 03:06 EDT, 18 May 2011

The FTSE 100 is seen opening up, recovering after sharp falls in the previous session in tandem with strength overnight in Asia following a late rally from lows on Wall Street.

Taking stock: Traders will react to jobs and rates news.

The UK blue-chip index closed down 62.69 points, or 1.1%, on Tuesday at 5,861.00, extending its losing streak into a fifth session, and ending below the 5,900 level for the first time since April 19.

Weakness in commodity issues and banks were the main drag on the FTSE 100 index on Tuesday, with metal and oil prices falling after weak US housing data revived concerns over the strength of the global economic recovery.

US blue chips were 1.1% lower by London's close but rallied late in the Wall Street session to end down 0.6%, suggesting investors may be looking for a short-term bounce. Asian shares rose from a six-week low on Wednesday led by consumer stocks.

Commodity prices bounced higher in Asian trade, with copper prices lifted by technical factors and a weaker dollar, while US crude prices rebounded after a surprise drop in gasoline stocks allayed concerns about weaker demand, so beaten-down miners and energy issues should lead the rally in London.

On the macroeconomic front, minutes from May's Bank of England Monetary Policy Committee meeting will be published, with no change expected from the 6-3 vote in April to leave UK interest rates unchanged.

The latest UK jobless report will also be released with April claimant count unemployment seen unchanged on the month, after a 700,000 rise in March, and the ILO unemployment rate seen steady at 7.8% for March.

Across the Atlantic, the main focus will be on the publication of minutes from the last FOMC meeting, due after the London close, with the latest weekly US mortgage and refinancing indexes set for release..

Ex-dividend factors will knock 4.95 points off the FTSE 100 index on Wednesday, with Admiral, Carnival, HSBC, and Sainsbury all losing their payout attractions.

Drugmaker Shire said on Tuesday that it plans to buy privately held Advanced BioHealing Inc, maker of a bio-engineered skin substitute, for $750m cash.

Xstrata plans to phase out copper smelting and refining in Australia by the end of 2016 in the face of a worldwide capacity glut, dismantle its plants and shift to sales of concentrates.

The US offshore regulator on Tuesday approved a BHP Billiton plan to explore for oil in the Gulf of Mexico. BHP Billiton's plan includes one proposed deepwater exploration well approximately 4,468 feet under water and about 124 miles off the coast of Louisiana.

Royal Dutch Shell said on Tuesday it wants to sell 260 retail gasoline stations in Quebec and the Maritime provinces as it continues to cut back its operations in Eastern Canada.

Harvey McGrath's position as Prudential chairman will come under increasing pressure this week when a group of the insurer's leading shareholders vote against his re-election to the company's board, The Daily Telegraph said.

Private equity firms are circling Whitbread, according to the Daily Mail's Market Report, with rumours of a £4bn-plus break-up bid for Britain's biggest hotel operator by an Apax Partners-led consortium.

There will be results today from Land Securities, Compass Group, Icap, Mothercare, Speedy Hire and UK Mail Group.