Britain's stock market will look to economic releases and speeches for guidance next week before the earnings season fully kicks-in, analysts said Friday. The FTSE 100 index of leading London shares closed at 5,230.8 points on Friday, down 1.4 points or 0.03 percent from the previous week after quickly shaking off the London terrorist bombings on July 7.
"The financial markets have quite rightly chosen to push the view that it's business as usual," said Jeremy Batstone of Charles Stanley stockbrokers.
"We're in the foothills of the UK results season, with a couple of companies reporting (next week), but generally speaking all eyes will be on economic data," he added.
Before the first estimate of second-quarter British gross domestic product growth on Friday, all eyes will be on the United States and Alan Greenspan's testimony next Wednesday, Batstone said.
"The most important (event) will be the Greenspan testimony... likely to provide clues regarding the health of the US economy and more significantly an indication to where he believes the peak in the rate-tightening process will be," he added.
While economists are forecasting the US Federal Reserve to continue raising the cost of borrowing from the current 3.25 percent, possibly to 4.0 percent by the year's end, the Bank of England is widely expected to cut rates by a quarter-point to 4.50 percent in August.
"We're in the summer lull and we're ahead of the results season and with an interest rate cut in the offing, it wouldn't surprise me if we saw the (London) market continue to make new three-year high points," Batstone said.
Investors will meanwhile be hoping for positive retail sales data for June following a recent slowdown in consumer spending which has fuelled expectations of a Bank of England rate cut.
Comments
Comments are closed.