UK stock market looks to Wall Street, economic data

London investors, hoping for a stock market rebound after a fortnight of sharp falls, will next week take their lead from British economic data and US earnings, analysts said.
The FTSE 100 index of leading London shares closed at 5,275 points on Friday, shedding 1.63 percent or 87.3 points from the previous week.
The FTSE has slumped by more than 4.0 percent in two weeks on concerns about the outlook for the US economy amid expectations of higher US inflation and interest rates.
"The S and P 500 (on Wall Street) and the FTSE 100 are beginning to look oversold which suggests that their downside should be limited and that they may even rally," according to Mike Lenhoff, chief strategist at Brewin Dolphin Securities.
"Much now depends on the earnings news flow. Around 120 S and P 500 companies will be reporting their earnings this week (and) the US equity market could gradually recover much of the ground it has lost over the past fortnight," Lenhoff said.
"The FTSE 100 is not quite as oversold as the S and P 500 but it too is more attractively valued than it was a week or two ago... Of course the FTSE 100 will go Wall Street's way but that could now be up, at least for a while."
Companies posting earnings reports and trading updates in London this week include Anglo-Australian mining giants Rio Tinto on Wednesday and BHP Billiton on Thursday.
Regarding British economic data, this week sees September retail sales and public finances on Thursday, a day before the first estimate of third-quarter GDP (gross domestic product) growth. Monthly inflation figures are published on Tuesday.
The Bank of England was meanwhile to release minutes from its latest rate-setting meeting on Wednesday. The central bank's nine policymakers held rates steady at 4.50 percent earlier this month.
The outlook for future British rates "could yet depend on just how soft this week's third-quarter GDP data and September retail sales data are, and whether or not the September CPI (consumer price index) data indicate that underlying inflation is picking up", Global Insight analyst Howard Archer said.
"It is entirely possible that the Bank of England could remain on the sidelines in November but hint that a cut could occur in December or early in the new year if growth remains muted, and there continues to be little evidence that high oil prices are feeding through to have second round inflationary effects," Archer added.