AstraZeneca may provide a spark for drugs firms and the broader UK share market this week when it outlines its next big drug hopes, although the threat of shocks from US companies will continue to hang over investors.
AstraZeneca, Europe's second biggest drug-maker, holds its Annual Business Review on Wednesday. It will be management's chance to respond to last month's US regulatory setback for its potential blockbuster anti-clotting pill Exanta as well as outline other products in its pipeline.
Oil prices will continue to have a two-way pull on shares.
BP releases a trading update on Monday. Britain's largest company and the world's second-biggest oil firm should signal bumper quarterly profits on the back of record crude prices, although the knock-on effect of higher fuel and materials costs remains a burden for the broader market.
In a week when UK interest rates are widely expected to be left on hold, investors will be keeping a wary eye on oil prices, and also on Wall Street.
The US quarterly earnings season begins in earnest, and recent warnings from companies such as Coca-Cola and Merck have already highlighted that the economic "traction" expected to take hold remains brittle.
"The UK market seems to want to go up, although it's still not conclusive whether American indices can break out of the trading ranges ahead of the election," said Roger Cursley, UK strategist at Investec.
But Cursley said he was confident the FTSE-100 share index will rise to 4,950 points by the end of the year. "The main drivers behind that are resilient earnings expectations for 2004 and 2005, a pretty low absolute valuation and the fact that the top of the interest rate cycle is clearly in view."
The FTSE rallied about 1.5 percent on Friday to 4,638.2, a 27-month high. The index has recently strongly outperformed most other major markets, helped by its heavy weighting of oil and mining stocks.
AstraZeneca has been the FTSE's ninth worst performer in 2004 despite regular share buybacks, after tumbling 11 percent in September to a 17-month low after a US medical panel urged regulators to reject Exanta.
Analysts at Goldman Sachs said AstraZeneca was unlikely to offer any late-stage pipeline positive surprises, but said it could raise earnings guidance for 2004, citing an expected acceleration in the fourth quarter.
They added: "We expect to gain a significantly improved perception of the mid-stage pipeline, which should give confidence in the very long-term growth outlook." But not all analysts were as bullish.
An update from mobile phone retailer Carphone Warehouse and traffic figures from airlines British Airways and easyJet are also scheduled in an otherwise thin corporate diary.
The week's economic focus will be on the Bank of England, but interest rates are expected to be left unchanged at 4.75 percent when announced at midday on Thursday.
Economists said five rate rises since November had taken the steam out of the economy, and BoE policymaker Kate Barker told Reuters this week the Bank could be nearly done raising rates, citing weakness in the housing market and the global economy.
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