London shares outlook - firmer, mirroring gains in Asia following new Dow record

London shares outlook - firmer, mirroring gains in Asia following new Dow record

	Published : Fri, 20 Apr 2007 06:48 By : Agencies Print this Story

LONDON (Thomson Financial) - Leading shares are expected to open firmer this morning, mirroring overnight gains on Asian markets after the Dow succeeded in closing at another record high, albeit in a less than convincing manner, with March retail sales expected to remain strong, dealers said.

According to IG Index, the FTSE 100 is seen opening around 20 points firmer at 6,460 having closed off 8.8 points at 6,440.8 in the previous session.

On the other side of the Atlantic, Wall Street closed essentially flat yesterday after struggling to resume a modest upward trend while investors juggled upbeat economic data, divergent earnings reports and a pullback in Chinese stocks.

The Dow rose 4.79, or 0.04 pct, to 12,808.63 -- its sixth straight gain. On Wednesday, the Dow reached fresh trading and closing highs, perhaps signalling a recovery from a late February pullback that was in part triggered by a sell-off on the Chinese market.

The Standard & Poor's 500 index fell 1.77 to 1,470.73, a day after the S&P hit a 6 1/2-year high. The Nasdaq composite index fell for the third straight session, slipping 5.15 to 2,505.35.

Over in Asia, the Nikkei 225 Index finished its morning session up 87.92 points at 17,459.89, while in Hong Kong the Hang Seng ended the half way point up 180.94 points at 20,480.65.

Looking at commodities, oil prices were mixed in Asian trading hours in a market driven by healthy fundamentals and a focus on US refineries' return to production.

New York Mercantile Exchange's main oil futures contract, light sweet crude for delivery in May, was up 0.18 usd at 62.01 usd per barrel from 61.83 usd per barrel in late trading in the US overnight, when it had declined a hefty 1.30 usd. Brent North Sea crude for June delivery was down 0.37 usd at 65.57 usd per barrel.

On the economic front today dealers will be looking at the latest data to monitor activity on the high street, which are expected to show sales have remained buoyant in March.

This is continuing on from February's strong data and adding to the weight of evidence suggesting that the Bank of England will raise interest rates again soon.

Retail sales are forecast to have risen by 0.4 pct in March from February for a 4.6 pct annual rise. In February, retail sales jumped by 1.4 pct month on month after a weak January, while the annual rate stood at 4.9 pct.

In earnings news, WPP, the UK advertising and marketing services firm, is expected to give a reassuring first quarter trading update today, reporting strong growth in emerging markets and confirming a gradual recovery in the UK market.

The world's second-largest advertising and marketing group, home to Young & Rubicam and J Walter Thompson agencies, in February reported a strong fourth quarter. In 2006 underlying pretax profit rose 14.5 pct, ahead of market expectations.

Growth was driven by the fast-growing economies of Asia Pacific, Latin America, the Middle East, and Central and Eastern Europe. Growth in Western Europe was slower, although the beleaguered UK advertising market showed some signs of improvement.

UBS expects WPP to announce organic revenue growth, which excludes the impact of acquisitions, of between 4-5 pct for the first quarter.

In press pick ups this morning, the FT reports that Stefano Pessina and KKR were last night preparing to table an improved 10.4 bln stg bid for Alliance Boots in what they hope will be a knock-out blow against rivals who are also circling the health and beauty group.

The newspaper wrote that bankers for Pessina, executive deputy chairman of Alliance Boots and its largest shareholder, and KKR were locked in talks with company executives and working towards a firm offer of about 1,070 pence a share. A statement is expected as early as this morning.

Meanwhile the Times reports that Persimmon, Britains largest housebuilder, and private equity firms are preparing to gatecrash the proposed 5.5 bln stg merger of George Wimpey and Taylor Woodrow.

The paper said rival suitors for Taylor Woodrow have asked several leading City investment banks over the past week to weigh up the housebuilder, which has a 2.95 bln stg market value.

It said sources close to the suitors said that they would await the merger documents from George Wimpey and Taylor Woodrow -- due in the next four weeks -- before making a move.

Traders will be monitoring the situation at EMI where the shares rose nearly 5 pct yesterday afternoon after rumours circulated of an imminent bid approach for the music company from either a private equity group or Warner Music.

EMI had previously rejected a highly conditional 260 pence-a-share offer from Warner, its US rival, in March.

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