October 29th, 2008 | by admin |
LONDON, Oct 29 (Reuters) - Britain's FTSE 100 .FTSE index is seen openingup as much as 5.5 percent on Wednesday, according to financial bookmakers,tracking a rally in U.S. and Japanese stocks on hopes that central banksworldwide would cut interest rates again.
The U.S. Federal Reserve is set to announce its rate verdict at 1815 GMT. Ina Reuters survey, primary dealers expect the Fed funds rate will be cut to 1percent from 1.5 percent.
Wall Street marked its second-best day ever on Tuesday, with the Dow Jonesindustrial average .DJI up 10.9 percent, the S&P 500 .SPX up 10.8 percentand the Nasdaq Composite Index .IXIC up 9.5 percent.
Japan also signalled on Wednesday it could follow the U.S. in cuttinginterest rates this week to protect the world's two largest economies from theglobal financial crisis [ID:nSP163305]. Tokyo's Nikkei average .N225 soared7.7 percent.
But Bank of England policymaker Tim Besley said on Tuesday the UK economywas set to weaken further, but interest rate cuts were not a magic bullet asconsumption may not respond to changes in borrowing costs. [ID:nLS558838]
Britain's financial minister Alistair Darling said governments must adapttheir economic policies to tackle the fallout from the financial crisis, asspeculation grows that Britain is preparing to abandon its fiscal rules limitingborrowing. [ID:nN28393406]
Financial bookmakers expected the UK benchmark to open up 180 to 217 points,after closing 1.9 percent higher on Tuesday.
Rolls-Royce (RR.L: Quote, Profile, Research, Stock Buzz) and GlaxoSmithKline (GSK.L: Quote, Profile, Research, Stock Buzz) will trade ex-dividend thissession and together are expected to take 3.5 points off the FTSE 100.
* US STOCKS-Wall St scores 2nd-best day ever on rate-cut hopes [ID:nN28428717] * Nikkei gains on BOJ rate cut talk, worry lingers [ID:nT178408] * Yen recovers from tumble on BOJ rate cut reports [ID:nLT194252] * Oil above $64 after US stocks surge; eyes rate cuts [ID:nN28430415] * Gold rises for 3rd day on firm euro, buoyant stocks [ID:nSP129983]
UK stocks to watch on Wednesday are:
BHP BILLITON (BLT.L: Quote, Profile, Research, Stock Buzz), RIO TINTO (RIO.L: Quote, Profile, Research, Stock Buzz)
Japan plans to ask the European Commission to oppose BHP Billiton's bid tomerge with rival Rio Tinto on the grounds that a merger would adversely affectthe domestic steel market, the Nikkei business daily reported. [ID:nT147867]
Rio's chief executive said the financial meltdown wouldn't push Rio toreconsider a takeover bid by BHP but it was rethinking its capital investmentprojects around the world. [ID:nN28409471]
Separately, BHP said nickel production at Australia's Ravensthorpe minewould rise to 7,000 tonnes in the January-June half year from 2,000 tonnes inthe current half. [ID:nSYD400602]
BARCLAYS (BARC.L: Quote, Profile, Research, Stock Buzz)
Barclays Capital, part of Barclays, is selling a $970 million portfolio ofloans on Tuesday to close out trades as part of a dispute between the bank andhedge fund Black Diamond Capital Management, Reuters Loan Pricing Corp said.[ID:nN28398300]
HBOS (HBOS.L: Quote, Profile, Research, Stock Buzz)
HBOS's Irish unit will not join Ireland's bank guarantee scheme as it is notin its cutomers' interests, the bank said on Tuesday. [ID:nLS536187 ]
ASHMORE GROUP (ASHM.L: Quote, Profile, Research, Stock Buzz)
The UK investment manager will exercise its right to raise its stake to 90percent in oil refiner Petron Corp (PCOR.PS: Quote, Profile, Research, Stock Buzz), but it may turn around and sell aportion to San Miguel (SMCB.PS: Quote, Profile, Research, Stock Buzz), a top Petron official said. [ID:nMAN147490]
SHIRE (SHP.L: Quote, Profile, Research, Stock Buzz)
The drugmaker is due to issue its third-quarter results.
CAIRN ENERGY (CNE.L: Quote, Profile, Research, Stock Buzz)
The oil explorer is due to issue a trading update.
STAGECOACH (SGC.L: Quote, Profile, Research, Stock Buzz)
The bus and rail firm is due to issue a trading update.
TODAY'S UK PAPERS
> Financial Times [PRESS/FT]
> Other business headlines [PRESS/GB]
(Reporting by Dominic Lau, editing by Will Waterman)
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