London's stock market starts braced for another possible interest rate cut by the Bank of England as well as some major company results in the closely-watched financial sector. Banking giant HSBC releases annual results on Monday and Standard Chartered on Tuesday.
Investors will watch closely to see if the world-wide credit crunch has hurt these two banks, both major players in Asia, which have so far suffered less than their British peers.
aiting key interest rate call, with the Bank of England and the European Central Bank (ECB) due to make announcements on Thursday, and more economic data due from the recession-plagued United States. "The upcoming week will be very important for financial markets with several major economic releases and events," said economists at ING bank in an analysis paper.
"Both the ECB and the Bank of England are widely expected to cut their policy rates by 50 basis points in an effort to provide more stimulus for the rapidly contracting economies," they added.
"However, the most market moving releases will be from the US with the ISM manufacturing index set to fall once again and the February employment report expected to be dismal based upon other labour market data already released." The British FTSE 100 index of leading shares ended the week down 1.52 percent compared to the previous Friday, at 3,830.09 points.
Banking shares bucked the trend in recent days however. Royal Bank of Scotland surged on Thursday despite reporting a record loss, supported by news that the government would insure billions of pounds' worth of its bad assets.
Shares in Lloyds Banking Group plunged by more than 20 percent on Friday however, after it reported a record loss for its HBOS division and predicted a loss in 2009. The British central bank holds its monthly meeting on Wednesday and Thursday. Some economists have predicted it could make a further interest rate cut below the current historic low of one percent. Oil giant BP announces annual results on Tuesday and insurer Aviva on Thursday.
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