LONDON (Thomson Financial) - Leading shares look set to open lower as Wall Street finished weaker with a drop in commodity prices likely to be a focus and earnings news also a spotlight with Drax, Legal & General and Standard Chartered all reporting.
Spread bettors IG Index see the FTSE 100 index opening around 19 points lower at 5,301 after closing Monday down 34.5 points to 5,320.2.
In the U.S. Monday, Wall Street fell in an erratic session after worries about inflation and the health of the economy overshadowed a drop in oil prices.
The DJIA index fell 42.17 points to 11,284.15. Separately, the S&P 500 index lost 11.30 points to 1,249.01 and the Nasdaq composite index declined 25.40 points to 2,285.56.
In U.S. economic news on Tuesday, the main focus will be on the Federal Open Market Committee meeting when U.S. interest rates are expected to be kept on hold at 2 percent.
And, the U.S. Institute of Supply Management is scheduled to publish its July non-manufacturing index, which is expected to increase to 49.0 from 48.2.
Over in Asia, the Nikkei 225 index was up 20.25 points at 12,953.43, while the Hang Seng index ended the morning session down 502.89 points at 22,012.03.
Meanwhile, oil prices hovered at a three-month low on Tuesday as concerns over tight supplies eased amid evidence of rising OPEC output and declining U.S. demand in the face of a weak economic outlook.
U.S. light crude fell $1.13 to hit $120.27 a barrel, while London Brent crude shed $1.03 to $119.65 a barrel.
Turning to UK corporate news, earning news is likely to be a focus with a slew of companies reporting.
Drax, the UK power generator, is expected to report a drop in first half earnings today reflecting higher coal and CO2 prices.
Analysts are looking for a fall in operating profits to 203 million pounds, compared to 288 million pounds last time.
And, Legal & General's half-year figures is likely to show a rise in bulk annuity sales, off-setting declines in the rest of the business.
The consensus is for operating profits on a European Embedded Value basis of 576 million pounds for the six months to end-June 2008. The range is from 529 million pounds to 632 million pounds.
Swiss broker UBS looks for profits of 561 million pounds for the half, compared to 570 million pounds last year.
Standard Chartered is also reporting first half numbers, while Lonmin is releasing a trading update and British Airways traffic figures.
In the midcaps, companies reporting first half numbers include Cookson, Meggitt, Rotork, Spirent Communications, Tullett Prebon and GKN.
Looking at the minnows, half-year numbers from Sportech, the football pools operator, will be buoyed by the acquisition of Vernons in December 2007, which cranked up its share of the United Kingdom pools market to 99 percent from 69 percent.
Anaylsts predict group pretax profits of 7.4 million for the six months to June, up from 5.2 million pounds in the comparative period.
Elsewhere, Lancashire Holdings is also reporting first half numbers, while Prodesse Investment is reporting quarter two figures.
Finally, back to UK economic news Tuesday's monthly survey from the Chartered Institute of Purchasing and Supply into the services sector, which makes up about two-thirds of the UK economy, is expected to make fairly grim reading.
Analysts think the main purchasing managers' index for July is set to dip further to 46.5 from June's 47.1, which was already the lowest since October 2001. A reading below 50 indicates contraction.
Meanwhile, UK manufacturing output is expected to recover modestly in June following the second sharp fall in three months in May.
Economists believe manufacturing output, which accounts for around 15 percent of GDP, will show an increase of 0.2 percent in June, following a 0.5 percent decline the previous month.
They also expect the wider industrial production measure, which also includes energy and mineral extraction, to have risen by a monthly 0.2 percent, following May's 0.8 percent decline.
joanne.frearson@thomsonreuters.com jf/jlw COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
Spread bettors IG Index see the FTSE 100 index opening around 19 points lower at 5,301 after closing Monday down 34.5 points to 5,320.2.
In the U.S. Monday, Wall Street fell in an erratic session after worries about inflation and the health of the economy overshadowed a drop in oil prices.
The DJIA index fell 42.17 points to 11,284.15. Separately, the S&P 500 index lost 11.30 points to 1,249.01 and the Nasdaq composite index declined 25.40 points to 2,285.56.
In U.S. economic news on Tuesday, the main focus will be on the Federal Open Market Committee meeting when U.S. interest rates are expected to be kept on hold at 2 percent.
And, the U.S. Institute of Supply Management is scheduled to publish its July non-manufacturing index, which is expected to increase to 49.0 from 48.2.
Over in Asia, the Nikkei 225 index was up 20.25 points at 12,953.43, while the Hang Seng index ended the morning session down 502.89 points at 22,012.03.
Meanwhile, oil prices hovered at a three-month low on Tuesday as concerns over tight supplies eased amid evidence of rising OPEC output and declining U.S. demand in the face of a weak economic outlook.
U.S. light crude fell $1.13 to hit $120.27 a barrel, while London Brent crude shed $1.03 to $119.65 a barrel.
Turning to UK corporate news, earning news is likely to be a focus with a slew of companies reporting.
Drax, the UK power generator, is expected to report a drop in first half earnings today reflecting higher coal and CO2 prices.
Analysts are looking for a fall in operating profits to 203 million pounds, compared to 288 million pounds last time.
And, Legal & General's half-year figures is likely to show a rise in bulk annuity sales, off-setting declines in the rest of the business.
The consensus is for operating profits on a European Embedded Value basis of 576 million pounds for the six months to end-June 2008. The range is from 529 million pounds to 632 million pounds.
Swiss broker UBS looks for profits of 561 million pounds for the half, compared to 570 million pounds last year.
Standard Chartered is also reporting first half numbers, while Lonmin is releasing a trading update and British Airways traffic figures.
In the midcaps, companies reporting first half numbers include Cookson, Meggitt, Rotork, Spirent Communications, Tullett Prebon and GKN.
Looking at the minnows, half-year numbers from Sportech, the football pools operator, will be buoyed by the acquisition of Vernons in December 2007, which cranked up its share of the United Kingdom pools market to 99 percent from 69 percent.
Anaylsts predict group pretax profits of 7.4 million for the six months to June, up from 5.2 million pounds in the comparative period.
Elsewhere, Lancashire Holdings is also reporting first half numbers, while Prodesse Investment is reporting quarter two figures.
Finally, back to UK economic news Tuesday's monthly survey from the Chartered Institute of Purchasing and Supply into the services sector, which makes up about two-thirds of the UK economy, is expected to make fairly grim reading.
Analysts think the main purchasing managers' index for July is set to dip further to 46.5 from June's 47.1, which was already the lowest since October 2001. A reading below 50 indicates contraction.
Meanwhile, UK manufacturing output is expected to recover modestly in June following the second sharp fall in three months in May.
Economists believe manufacturing output, which accounts for around 15 percent of GDP, will show an increase of 0.2 percent in June, following a 0.5 percent decline the previous month.
They also expect the wider industrial production measure, which also includes energy and mineral extraction, to have risen by a monthly 0.2 percent, following May's 0.8 percent decline.
joanne.frearson@thomsonreuters.com jf/jlw COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
© 2008 AFX News
