UK Stocks - Factors to watch on Feb 1

 

Britain's FTSE 100 index is seen opening down 35-45 points, or as much as 0.9 percent lower on Monday, according to financial bookmakers, reversing Friday's rally and tracking weakness in Asia and on Wall Street.

Commodity issues are likely to lead the retreat as the price of crude oil and metals fall back on concerns about global growth and sluggish demand.

Fresh economic data out of China, the world's second-largest energy consumer, heightened concerns that Beijing would further tighten monetary policy.

An official purchasing managers index on Monday remained firmly in expansionary territory, while a companion poll by HSBC scaled an all-time high with both reports showing evidence of a further increase in cost pressures.

The UK blue chip index closed 42.78 points, or 0.8 percent higher, on Friday at 5,188.52 as banks and mining issues rebounded from sharp losses in the previous session helped by encouraging U.S. data.

But U.S. stocks turned around from early gains to end lower on Friday as a drop in technology issues pushed the S&P 500 to its worst monthly decline since February 2009.

Most domestic macro attention this week will be on the Bank of England interest rate decision, due at midday on Thursday, with not a lot of economic data due to provide further clues to economy's health ahead of that outcome.

House prices in England and Wales fell in January at their slowest annual rate since March 2008, according to property data company Hometrack on Monday.

Hometrack said house prices rose 0.1 percent on the month in January to stand 0.8 percent lower than a year ago. That followed a 1.9 percent annual decline in December.

January CIPS manufacturing PMI data, however, are due for release at 0928 GMT on Monday, with December Bank of England consumer credit and mortgage lending numbers scheduled for release at 0930 GMT.

Across the Atlantic, the main focus will be on the January U.S. jobs report,due on Friday, with December personal income and personal consumption numbers scheduled for release at 1330 GMT on Monday, and December construction spending and January's ISM report due out at 1500 GMT.

* GLOBAL MARKETS-Asia shares fall; U.S. dollar firms

* US STOCKS-Wall St falls on euro-zone worry, tech slide

* Tokyo's Nikkei share average closes up 0.07 pct

* FOREX-Dollar keeps broad gains, euro teeters at 7-mth low

* TREASURIES-Prices gain on stock losses, fiscal worries

* Oil extends decline towards $72, worries over demand

* PRECIOUS-Gold near $1,080, dollar rise, US bank plan weigh

* METALS-LME copper prices off for fifth day on long selling

UK stocks to watch on Monday are:

VEDANTA RESOURCES

The London-listed mining group is considering a spin off of up to six of its businesses to boost its overall market value, the Independent on Sunday reported, citing unnamed bankers.

XSTRATA

The world's top thermal coal exporter, is considering up to A$15 billion($13.3 billion) investment to boost output at its Australian thermal coal project to 100 million tonnes a year, it said on Monday.

ROYAL DUTCH SHELL

The Anglo-Dutch oil group said on Sunday it had shut down three pumping stations in Nigeria's Niger Delta after a key crude oil pipeline was sabotaged.

HSBC

HSBC is happy with its stake in Bank of Communications as its primary investment vehicle in China, HSBC chief executive Michael Geoghegan said on Monday, speaking in an interview on CNBC.

Geoghegan made his comments after the Sunday Telegraph reported that the British lender was considering a bid for a major Chinese bank to reinforce its presence in the country as other foreign lenders retrenched.

ROYAL BANK OF SCOTLAND

JPMorgan Chase only wants the non-U.S. operations of RBS Sempra, Royal Bank of Scotland's commodities unit, having previously entered talks to buy the whole business, energy news service SparkSpread reported.

Also, RBS is considering selling and leasing back Gogarburn, its main headquarters in Scotland, as part of a reassessment of its 4 billion pound property portfolio, the Daily Telegraph said on Monday.

GLAXOSMITHKLINE

Britain's biggest drugs company, which reports fourth-quarter results this Thursday, plans to cut more costs with the loss of several thousand jobs as competition from new generic drugs weighs on sales, several newspapers reported on Sunday.

PETROFAC

The oil services provider is seeking to realise the value of its energy investments by spinning off its North Sea oil and gas assets, the Financial Times said on Monday.

BT GROUP

Shadow Chancellor of the Exchequer George Osborne said on Sunday the Conservative Party would loosen BT's hold on the local telephone network and support changes to the regulatory framework to allow private investors to pay for better broadband cabling, The Guardian said on Monday.

NORTHUMBRIAN WATER

The water group could receive a 1.7 billion pound takeover offer from Canadian pension fund, the Ontario Teachers' Pension Plan, which already holds a 27 percent stake in Northumbrian, the Sunday Times reported, citing unnamed sources.