London Shares Outlook - Lower, Imperial Tobacco FY in Focus; NY Closes Higher

Source from:  Article layout: raw LONDON (Thomson Financial)  10/31/2007

UK blue-chips are tipped to open lower, giving away some of yesterday's gains, with investors eyeing Imperial Tobacco's full-year results today, while US stocks finished higher overnight on hopes of an interest rate cut this week. According to spread-bettors IG Index, the FTSE 100 index is seen opening around 16 points lower at 6,689.0, after closing 44.7 points higher at 6,706.0 yesterday. In the US, Wall Street advanced as investors, undeterred by record oil prices, speculated that the Federal Reserve will cut interest rates later this week to boost the slow economy and lure more buyers into the troubled credit markets. The Dow Jones industrial average rose 63.56, or 0.46 pct, to 13,870.26. Broader stock indicators also gained. The Standard & Poor's 500 index rose 5.70, or 0.37 pct, to 1,540.98, while the Nasdaq composite index rose 13.25, or 0.47 pct, to 2,817.44. Meanwhile, in Asia this morning, the Japanese Nikkei ended the morning down 117.44 points or 0.7 pct at 16,580.64, while Hong Kong's Hang Seng was up 39.02 points or 0.1 pct at 31,625.92 by midday. Oil retreated in Asian trade after spiking to a historic high of over 93 usd on geopolitical concerns in the Middle East. Earlier today, New York's main contract, light sweet crude for December delivery, was 84 cents lower at 92.69 usd a barrel from its record close of 93.53 dollars in US trading Monday. The contract set a new intraday high of 93.80 dollars on Monday. Brent North Sea crude for December delivery dropped 71 cents to 89.61 usd. It hit a record high of 93.80 usd Monday. In macro news due today, the Confederation of British Industry is set to show that activity on the UK's high streets is easing in the wake of higher interest rates and the recent credit crunch. In its monthly distributive trades survey, the CBI is expected to reveal that a balance of +9 pct of retailers will report sales were higher in October than in the same period a year ago, down on September's +12 pct. The expected sales balance for November is expected to slip to +12 pct from +17 pct. In equity stories, Imperial Tobacco's full-year results are expected to show a rise in pretax profits of around 7 pct to 1.24 bln stg, with a final approval of the Altadis deal still to come. Consensus opinion expects full-year sales to be 3.3 bln stg, up from 3.1 bln in 2006, while EPS is predicted to be 135 pence. Evolution Securities said that investors will need to focus on current results, rather than on updates to the Altadis regulatory situation. Meanwhile, investors will be watching closely as Schroders report its third-quarter trading statement today. On the second line, Luminar Group is expected to update investors on the progress of its nightclub refurbishing and opening programme when it reports its first-half results today. The late night entertainment group is targeting 120 clubs across the UK, branded under the Oceana, Lava & Ignite and liquid brands, refurbishing some of its unbranded nightclubs in the process and disposing of non-core sites. In a note to investors Charles Stanley Securities said Luminar is effectively six months into its investment programme, which should see it add nine new Oceanas, 1 Lava & Ignite and 18 Liquids over the course of three years. Among smaller companies, BNS Telecom Group, who were due to publish its full-year results today, has now said these will be delayed to mid-November following the closure of its Network Services division. tf. Enditem