January 18, 2008

FTSE likely to head lower at open

London equities were expected to fall at the open on Wednesday after sharp losses on Wall Street and in Asia keep the focus firmly on the economy and the outlook for corporate earnings.

The FTSE 100 was expected to fall about 22 points at the open, according CMC Markets.

CMC trader James Mitchell said: "The FTSE is going to be eyeing the 6,000 level, which hasn't been tested since last August, and although UK employment data may offer some indication as to the strength of the UK economy, it's the worldwide picture - specifically the state of the US - that will continue to dominate."

Meanwhile, data from the Royal Institute of Chartered Surveyors showed that house prices fell in December, at the fastest rate since the early 1990s when the UK was in recession.

Rio Tinto, the mining group currently resisting takeover moves by BHP Billiton, said that in 2007 it had set annual production records for iron ore, bauxite, alumina, aluminium, refined gold and refined copper.

"Against a background of record prices for many of our commodities and a strong outlook for demand in developing markets, we look forward with confidence," the company said.

Experian, the information services group, reported fourth quarter organic revenues were up 2 per cent. The company said trading conditions were likely to remain tough and announced plans to cut costs. Experian added that it continued to target double-digit earnings growth for the full-year.

Punch Taverns said like-for-like sales at its core managed estate fell by 2.2 per cent in the 20 weeks to January 5, as last year's smoking ban in England and Wales coincided with declining consumer confidence.

The company said it remained cautious over the short-term outlook for the pub sector, but said long-term prospects were good.

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