Positive momentum to continue as oil fears lessen

THE fighting in Libya was a dominant theme for the markets last week, and is set to continue to be so, with Saudi Arabia’s pledge to bridge any shortfalls in oil production stabilising crude prices and likely to provide some underpin to stock markets at least for the open today.

Assuming the London Stock Exchange doesn’t suffer from any more technical glitches this morning, GFT is quoting the FTSE 100 index to open up 12 points from Friday’s close, at a level of 6,013. Elsewhere in Europe the German Dax is called up five points at 7,190, and the French CAC is quoted up four points to open at 4,074.

Although nerves may have been calmed somewhat with regard to the Middle East, there is ample scope for volatility in the week ahead, not least with banking giant HSBC’s annual results released today. Forecasts are for an impressive jump in pre-tax profits from $7.1 bn (£4.4bn) in 2009 to around $20bn, due largely to anticipated improvements in bad debts and growth in Asia.

Further market-moving events are in store by way of economic data from the US, including the ISM manufacturing survey, the Federal Reserve’s Beige Book, and with Friday being the first of the month it heralds potentially the headline event of the week by way of the non-farm payrolls, although the simultaneously-released unemployment rate will also be a crucial focus, having edged down to nine per cent in January. Outside of the States, interest rate decisions are due to be released from the Bank of Australia, the Bank of Canada and the European Central Bank, with all three expected to hold rates steady.

Martin Slaney is director of global dealing operations at GFT