Tuesday May 13, 07:23 AM
London shares outlook - Higher after New York, Asian gains; eyes on CPI
LONDON (Thomson Financial) - Leading shares are expected to open higher Tuesday, tracking gains in New York and Asia, with underlying caution ahead of inflation numbers.
According to CMC Markets, the FTSE 100 index is expected to open around 23 points higher at 6,244, having closed 15.9 points firmer Monday.
In the U.S., stocks rallied Monday as oil prices fell back and alleviated some of investors' concerns about accelerating inflation.
The DJIA rose 130.43 points to 12,876.31, while the Standard & Poor's 500 index advanced 15.30 points to 1,403.58, and the Nasdaq composite (NASDAQ: news) index gained 42.97 points to 2,488.49.
In Asia, the mood was also buoyant, with the Nikkei 225 (news) index up 1.6 percent at 13,958.06, and the Hang Seng (news) index up 174.08 points at 25,237.25.
Oil prices briefly spiked to a new record above $126 a barrel Monday but later retreated as investors cashed in profits and a massive earthquake in China raised the possibility of a drop in demand.
On the macro front, Britain's inflation rate is expected to have risen further in April, helping to explain why the Bank of England opted not to cut interest rates for the second month running last week.
Official figures are set to show that the annual CPI (NYSE: CPY - news) inflation rate spiked up to 2.6 percent in April. Prices will be boosted by the usual round of administered price increases - council tax, TV licences and prescription charges - and also by Budget increases in alcohol and tobacco. Gas and electricity inflation is also expected to move higher.
Turning to scheduled corporate news, Enterprise Inns (LSE: ETI.L - news) , which last week received the go-ahead from HM Revenue & Customs to convert to the more tax efficient Real Estate Investment Trust model, will report its interim results today.
Swiss broker UBS (Virt-X: UBSN.VX - news) is forecasting a 12 percent decline in pre-tax profits to 130.9 million pounds for the six months to end-March 2008.
But the real interest is likely to be focused on how the group plans to reorganise itself in readiness for conversion to a REIT.
TUI Travel (LSE: TT.L - news) is also slated to unveil interim numbers, while trading statements are due from G4S, and Greggs (LSE: GRG.L - news) .
On the AGM front, Next, Alliance & Leicester and International Power (IPWG.PK - news) are scheduled to hold shareholders' meetings.
Turning to the second tier, when VT Group (LSE: VTG.L - news) reports its finals Tuesday, investors will be interested on progress with the delayed programme to build two new aircraft carriers for the Royal Navy.
VT and BAE Systems (LSE: AP16.L - news) are waiting for permission from the MoD to begin production on the carriers before they can launch their proposed shipbuilding joint venture.
Meanwhile, UBS is expecting VT to report full-year underlying pretax profits of 87.4 million pounds, compared to 74.2 million pounds last time.
Babcock International will also report its preliminary figures today. The consensus forecast is for underlying pretax profits of 93.1 million pounds, compared to 62.5 million pounds last time.
Enodis (LSE: ENO.L - news) is due to release interim results.
Serco, the support services company, is expected to report a positive first-quarter trading update today.
Investors will focus on the progress being made in the Sellafield Nuclear Decommissioning bid, as well as any news on the acquisition pipeline.
AGM meetings are slated for ARM Holdings (LSE: ARM.L - news) , F&C Asset Management, Greggs, Keller Group, Travis Perkins (LSE: TPK.L - news) , United Business Media (LSE: UBM.L - news) , and Premier Foods (LSE: PFD.L - news) .
Looking at the minnows, Carluccio's, the Italian restaurants group, will report its interim profits today. Analysts are looking for pre-tax profits of about 2.9 million pounds, compared to 2.4 million pounds last time.
Clean Diesel Technologies (LSE: CDTI.L - news) , European Capital (LSE: ECAS.L - news) , and Prodesse Investment are also set to update the market on interim numbers.
And finals are due from Invu (LSE: NVU.L - news) and Summit Corporation.
On the AGM front among the small caps, shareholder meetings should be held by Kerry Group (Dublin: KRZ.IR - news) , Lookers (LSE: LOOK.L - news) , New Europe Property Investments, OC Oerlikon, Polymer Logistics, Spirax-Sarco Engineering, and TG21 (LSE: TGP.L - news) .
Kofax, meanwhile, is due to update on trading.
In other economics news, higher fuel and energy bills hit retail sales in the UK in April hard, the British Retail Consortium (BRC) said today.
In its monthly survey of the sector, the BRC said like-for-like sales, which exclude new stores and space, fell 1.5 percent in April from the year before.
The decline was unexpected. Analysts polled by Thomson Financial News thought sales would modestly rebound 0.2 percent in April following March's 1.6 percent fall.
And the crisis in the UK's lending markets has pushed the number of chartered surveyors reporting house price falls in April to its highest level since records began, the Royal Institution of Chartered Surveyors said today.
In its monthly survey of the sector which began in 1978, RICS said 95.1 percent more of its members reported a fall in prices rather than a rise in the three months to April. The regional picture is even more depressed with surveyors in East Anglia, the North and North West unanimous that house prices are falling.
The overall house price balance was even worse than the -79.4 percent recorded in March. The original estimate for March of 78.5 percent was itself a historical high.
The scale of the decline, the ninth in a row, was unexpected. The consensus of analysts polled by Thomson Financial News saw the house price balance worsening slightly to -80 percent.
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