The British stock market will be looking to build on recent strong gains amid another batch of company trading updates. The FTSE 100 index of leading shares finished at 6,732.40 points on Friday, up 227.3 points or 3.49 percent from a week earlier.
The prestigious index had plunged by 2.57 percent in value the previous week amid jitters over rising global interest rates and their impact on economic growth, consumer spending and corporate profits. Investors will focus next week on a trading update from J Sainsbury, the British supermarket chain, which is facing fresh take-over speculation.
The Gulf state of Qatar on Friday raised its stake in J Sainsbury to 25 percent, sparking market speculation that it may launch a take-over. Delta Two, an investment fund backed by Qatar, said in a statement that it had bought an extra 123 million shares in J Sainsbury, or seven percent of the group, at a price of 595 pence per share.
"We do not know Delta's intentions but this could be a precursor to a full bid," broker Citigroup said in a research note to clients. Analysts speculated that Delta wanted Sainsbury to unlock the value of the chain's property portfolio, but the group has previously ruled out disposal of its estate.
In other company news, British confectioner Cadbury Schweppes was also due to issue a trading update next week. Cadbury pleaded guilty on Friday at a court in England to offences linked to a salmonella scare in 2006 that led to the recall of one million chocolate bars and cost the company 30 million pounds (60 million dollars, 44 million euros).
The group could face unlimited fines and possible prison sentences for some of its employees over the scandal. On the economic radar next week, the Bank of England was due Wednesday to publish the minutes from its rate-setting huddle earlier this month.
The BoE had frozen interest rates at a six-year high of 5.50 percent on June 12, as it took stock of a quarter-point increase in May that was aimed at tackling rising inflation.
Annual inflation slowed to the weakest pace for seven months in May, as lower domestic energy prices sparked the second monthly drop in a row. However, BoE governor has recently indicated that the central bank may have to hike rates again in the coming months.
Comments
Comments are closed.