All eyes on Lloyds in FTSE-100 this week

08 Mar, 2004

Britain's blue-chip index, which is due for a quarterly reshuffle on Wednesday, will focus on results from UK bank Lloyds TSB this week as investors count the cost of Friday's disappointing US jobs data.
Britain's fifth-biggest bank, due to report on Monday, is expected to post annual profit boosted by gains on disposals, and investors are looking for the company to buy back shares.
"We believe that operationally, Lloyds' results may well surprise on the upside, with better-than-anticipated margins and higher earnings from insurance and investments," analysts at Credit Suisse First Boston wrote in a note.
But the impact of potentially strong company results could be tempered this week as investors return to fretting over the health of the world's biggest economy.
A big rise in the FTSE-100 index this week on hopes that unemployed Americans were rejoining the workforce in big numbers was cut back after US data showed payrolls rose only 21,000, much less than the expected gain of about 125,000.
By 1416 GMT the blue-chip index stood at 4,523.4, 0.7 percent up on the week but back from the 20-month high of 4,566.2 points reached in the run up to Friday's data.
Hilary Cook, Director of Investment Strategy at Barclays Private clients, was sceptical about recent speculation the FTSE could soon surge above 4,600 points.
"We've only got a target of 4,660 for the end of the year. To get it all in January to March would seem optimistic. The way this market has been since last May has been two steps forward and one back," she said.
"The jobs data was disappointing. We've had good momentum but can now expect consolidation below 4,500," she added.
David Franklin, a chartist at Christows stockbrokers also warned that company results could easily trip up the bulls.
"If companies disappoint even slightly, the market is in the mood to punish severely," he added.
Chilean copper miner Antofagasta will post results and join the FTSE 100 at the start of this week.
Expected to report a big jump in net earnings on Tuesday thanks to 2003's surging copper prices, the miner will replace food retailer Safeway.
More index changes are expected when compiler FTSE unveils its latest quarterly reshuffle on Wednesday, based on market prices at Tuesday's close.
Foreign & Colonial Investment Trust is set to fall out of the FTSE-100, replaced by the largest midcap stock, currently leisure group Whitbread. Also close to winning promotion are pubs group Enterprise Inns and music company EMI Group.
A batch of blue chip companies will jockey for position as they post results, including Royal & Sun Alliance, recruitment firm Hays and Shire Pharmaceuticals.
Britain's second-largest general insurer is expected to report an 18 percent drop in annual profit on Thursday as a slew of subsidiary sell-offs and a significant reserving charge overshadow an improved underwriting performance.

Read Comments