LONDON (AFX) - Leading shares are tipped to edge higher in early trade, boosted by a recovery on Wall Street and news oil prices rebounded slightly from recent lows, but gains could be capped ahead of key UK inflation data, dealers said.
According to CMC Markets, the FTSE 100 is seen opening around 14 points firmer at 5,865 after closing yesterday off 28.5 at 5,850.8.
Meanwhile, Wall Street ended a see-saw session slightly higher, rebounding from initial losses, as the continuing drop in the price of oil offset news Dell would delay filing its second-quarter earnings report.
The DJIA finished 4.73 points higher at 11,396.84, the S&P 500 index was 0.62 firmer at 1,299.54 and the Nasdaq ended 7.46 better at 2,173.25.
And today, all eyes will be on the July trade gap, with the deficit seen widening slightly to 65 bln usd in July from 64.8 bln usd a year earlier.
And over in Asia, the Hang Seng Index ended the morning up 97.54 at 17,046.13, while the Nikkei 225 closed for lunch 4.94 to the good at 15,799.32.
Still in Asia, oil prices rebounded slightly after hitting 6 months lows in the US yesterday.
Earlier this morning, New York's main contract, light sweet crude for October delivery, was up 0.28 usd at 65.89 usd, having sunk to 64.85 usd in New York -- its lowest point since March 28.
Back in London, on the economic front, investors will scrutinise August inflation data, with the market keen to see if the Bank of England's recent rate hike was justified.
The annual CPI rate is seen coming in at 2.4 pct for the second month running -- holding above the 2.0 pct target set by the Treasury for the Bank of England.
The core CPI rate which excludes food, alcohol, energy and tobacco, is predicted to reach an annual rate of 1.1 pct in August from 0.9 pct the previous month.
And the annual all-items RPI rate, used in pay deals, is seen at 3.3 pct in August, unchanged from July while the RPI-X which excludes mortgage interest payments is seen rising by 3.3 pct, up from 3.1 pct the previous month.
In equities, on a threadbare diary for blue chips, interim results from Drax will take centre stage.
According to Dresdner Kleinwort, the energy provider should post clean EBITDA of 330 mln stg, EPS of 54 pence and a dividend of 84p, but added due to the gearing to the power prices, the consensus range is likely to be wide.
However, the broker believes investor focus will be largely on the contracted position for the full year 2006 and 2007, on confirmation buoyant power prices are feeding through to the profit and loss account.
On the second-line, housebuilders will continue to come under the spotlight with Redrow expecting to unveil full year pretax profits of around 119.4 mln stg, a fall of 15 pct from last year.
The profit fall follows a 22 pct decline in pretax profits in Redrow's interims in March, caused by declining margins, industry price discounting and a higher proportion of sales of lower cost homes.
Analysts predict a spread for 2006 full year pretax profits of between 115.2 mln stg and 122.1 mln stg.
In engineering, Cobham is poised to report a rise in interim profits to around 75 mln stg, up from 70 mln previously.
Cobham said in a trading statement in June that trading would be biased towards the second half and that the outlook for defence and commercial aerospace remained strong.
Nevertheless, Barclays Stockbrokers said although Cobham will be reassuringly optimistic about 2006, no change to estimates are anticipated.
Still in earnings, Lloyds insurer and reinsurer Kiln is flagged to post slightly lower interim profits, hit by the weak dollar.
According to a consensus of analysts polled by AFX News, the group is seen delivering profits of 27 mln, down from 34.3 mln in the first half of 2005.
Elsewhere a raft of smaller cap companies are also due to post numbers, including Computacenter, Evolution, French Connection, Jardine Matheson, ukbetting, Vernalis and Thorntons.
Turning to the press, financial public relations group Financial Dynamics is to be bought by US-based FTI Consulting for an initial 139 mln stg in cash, the Financial Times reported.
The FT said the deal represents the highest price paid for a financial PR company, and marks the first time a financial PR firm has been bought by a consulting company rather than a media or marketing group.
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