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FTSE 100 seen flat after modest gains on Wall Street, Asian stocks rise

The FTSE 100 is poised for a flat open after US stocks posted small gains despite getting hit by two disappointing updates that came out yesterday.

The US Labor Department said that the number of jobless claims increased by 11,000 to 444,000 in the week to 9 January, while the four week average amounted to 440,750, which is 9,000 less than the previous week’s average of 449,750.

The Commerce Department offered more downbeat news, saying that retail sales in December fell 0.3% month on month to US$353 billion, while total for the full year 2009 slid 6.2% from 2008.

The markets were later helped by an update from the US government, which said than businesses increased their inventories by 0.4% in November, or double the expected figure.

The news helped the stock market shake off the negative impact from the retail sales and jobless updates, helping the Dow Jones Industrial Average to a 0.3% improvement, while the broader S&P 500 index added 0.25% and the technology heavy NASDAQ composite was up 0.4%.

Asian stocks mostly rose with the exception of Hong Kong’s Hang Seng, which declined 0.3%, Japan’s benchmark Nikkei 225 set a fresh 15 month high after rising 0.7%, China’s Shanghai composite index climbed 0.3%, South Korea’s KOSPI added 1% and Australia’s S&P/ASX 200 was marginally higher.

The UK blue chip index edged 0.45% higher yesterday with miners leading the way. Base metal focused Xstrata (LSE: XTA) and Antofagasta (LSE: ANTO) emerged atop the leaderboard with gains of 4% and 3% respectively. Plumbing and heating materials manufacturer Wolseley (LSE: WOS) also tacked on nearly 3%, as did cruise operator Carnival Corporation (LSE: CCL) and bailed out bank Lloyds (LSE: LLOY).

Home Retail Group (LSE: HOME) was the biggest faller among the blue chips, sliding 6.2% despite upping its profits forecast for the full year. Retailer Marks and Spencer (LSE: MKS) and specialist distribution group Bunzl (LSE: BNZL) followed, shedding about 3%. Commercial property stocks also were in decline with British Land (LSE: BLND) and Segro (LSE: SGRO) moving down 2%, while Liberty International (LSE: LII) declined 1.7% and Land Securities (LSE: LAND) and Hammerson (LSE: HMSO) lost more than 1%.


Oil prices showed more downward movement as March Brent Crude declined to US$78.12/barrel and US light, sweet crude retreated to US$78.95/barrel.

Precious metals also were in retreat as gold slid to US$1,135/oz, silver was down to US$18.50/oz and platinum dropped to US$1,605/oz.

Base metals followed with copper and nickel moving down to US$3.37/lb and US$8.25/lb, while zinc slid to US$1.11/lb.

More data is due out in the US today, including updates for US inflation, industrial output and capacity utilisation numbers and the University of Michigan consumer sentiment index for January.

Disclosure: The author holds no positions in the company