LONDON (ShareCast) - The FTSE is set for a modest rise early on in today's session after what has so far been a week of rangebound trading for markets, with investors continuing to seek firmer direction.

Blue chips are expected to open five points higher than yesterday's close of 6,851.22, with gains likely to be limited by the negative finish across the board for US stocks last night, which saw sentiment weakened slightly by worse-than-expected figures on Eurozone money supply and German unemployment.

Meanwhile, SpreadEx's Samuel Fox pointed out that: "Asian markets gained throughout the night, edging towards one-year highs as positive sentiment flows into the markets from around the globe. Bond prices have increased ahead of the European Central Bank press conference where expectations firmly believe we will see some form of easing on the monetary policy.

"With bank holidays in France and Germany, economic data is thin from Europe throughout the day and we are currently calling the FTSE 100 and German Dax flat ahead of the open," he said.

That came as investors awaited a report due for release later today that is expected to show the US economy shrank in the first quarter, with the data widely anticipated to reveal that exports didn't rise as much as had been first believed and construction spending was less that previously thought. The US gross domestic product (GDP) reading is due to be published at 13:30.

"After such a poor reading last time out, many will be looking for a boost in these latest revised figures," explained James Hughes, a Chief Market Analyst at Alpari. "Previously poor weather had been blamed for shockingly poor GDP growth out of the US, leaving many officials such a Fed Chair Janet Yellen to shrug off the number and instead focus on unemployment when dealing with monetary policy.

"With such a focus put on the fact that the number was a freak due to the weather there will be added pressure when next quarters figures are released that the number jumps significantly higher. Should the growth level stay around the same then serious question would be asked about just what the focus should be within the Fed."

Back in the UK, and in this morning's company news, decent weather helped DIY retailer Kingfisher lift profits by a fifth in its first quarter, as the company saw like-for-like sales rise across the board. Kingfisher also announced a special dividend of 4.2p per share, equalling £100m, as part of the total £200m in capital to be returned to shareholders this year.

Supermarket giant Tesco has signed a joint venture with state run China Resources Enterprise to create the biggest food retailer in China. The deal, which includes nearly 3,000 outlets, increases Tesco's foothold in the world's biggest consumer market.

Chief Executive Philip Clarke said: "We're very pleased to have completed this historic agreement. The partnership creates a strong platform in one of the world's largest markets. We can now combine our strengths to build a profitable multichannel business, offering our customers in China the best of modern retail."

UK water company Severn Trent reported earnings in line with consensus, with new Chief Executive Liv Garfield just eight weeks into the job.

NR

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