UK stocks could start April higher after hefty losses left the FTSE oversold in March, but much will hinge on key economic data at the end of this week.
Oil titan BP is likely to provide the main corporate focus with its annual strategy presentation on Monday. Several trading updates are also expected from companies such as mobile operator mmO2, mortgage bank Northern Rock and utility Scottish Power.
Analysts were broadly positive on market prospects as the results season nears an end. They said the blue chip FTSE-100 index should make at least modest progress after it fell 250 points from a 20-month closing high at the beginning of March to a four-month closing low of 4,309.4 this week.
"The market's off a fair bit from its high," said Kevin Gardiner, head of European Equity Strategy at HSBC. "We think the market offers reasonably good value and we've been expecting it to rally through the year."
But economists cautioned that any gains could quickly be unwound if US non-farm payroll numbers next Friday come in below expectations.
"I don't think stocks have any real prospect of decent recovery until we see a concrete run of stronger data coming through on the job front in the States - that's the touchstone for recovery," said David Brown, chief economist at investment bank Bear Stearns.
Also on the economic agenda is the GfK survey of UK consumer confidence on Tuesday and US factory orders and a Chicago purchasing managers' update on Wednesday. Oil major BP's annual strategy presentation on Monday will be the main focus in a relatively quiet week for corporate news.
In particular, investors will be waiting for any news on reserves bookings after rival Shell shocked the market with two cuts to its reserves so far this year.
Mobile operator mmO2 will also bring investors up to speed on Wednesday with an update on trading. Europe's sixth-biggest mobile phone operator has recently been the focus of intense bid speculation and is facing competition from rival 3UK.
A statement from Northern Rock on Friday will be closely watched for clues on the health of Britain's housing market. The mortgage bank beat market expectations with its full-year results in January. Updates are also expected from utility Scottish Power and telecoms firm Thus on Monday. Mobile phone seller Carphone Warehouse and radio group Capital Radio are set to inform the market on Thursday.
Sports fans will keep an eye on interim results from soccer club Manchester United on Tuesday and final figures from Kesa, Europe's third-largest electricals retailer, expected on Wednesday.
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