FTSE seen opening lower

The FTSE 100 is seen opening 11-12 points lower on Tuesday, retreating slightly after sharp gains the previous session saw it break the 5,500 level to hit a 16-month peak.

Investors are seen pausing for breath on the second trading day of 2010 after the blue-chip index gained 1.6 percent on Monday to close at 5,500.34, its highest close since September 2 2008.

The overall tone of markets remains positive after U.S. data showed a fifth straight month of expansion in the manufacturing sector on Monday while figures also showed manufacturing activity in China growing at its fastest pace on record.

UK stocks to watch on Tuesday are:

CADBURY

Kraft Foods said it will extend its acceptance period for Cadbury shareholders to tender their shares.

RETAILERS

Bellwether retailer John Lewis posted a surge in sales over the Christmas period, including its best ever week's trading and forecast a slow recovery in consumer spending in 2010.

ROYAL BANK OF SCOTLAND

Plans by Royal Bank of Scotland to sell its Pakistani business to a local lender have been derailed after the bank was unable to secure regulatory approval for an agreement it reached five months ago, said the Financial Times.

MITCHELL'S & BUTLERS

The pub and restaurant operator said it will appoint Ronald Robson, a representative of rebel shareholder Joe Lewis to its board from January 22.

SONGBIRD ESTATES

The company said it had appointed three Qatari directors to its board after its 895 million pounds capital hike in 2009.

NEXT

The retailer will announce a trading update