City sources predict FTSE 100 will open down 22 points from previous close of 5,342.
Stocks to Watch
Medical devices firm Smith & Nephew posted a better than expected 27% jump in first quarter profit and said it is on the right track for the rest of the year. The trading profit in the quarter was $250m, up from $183m in the first quarter of 2009. Revenues rose to $995m in the period compared to $865m last time.
Indian mining giant Vedanta posted a sharp rise in earnings for the year to March 31 after ramping up metals production and benefiting from the rebound in commodity prices. The company posted earnings before depreciation and amortisation (EBITDA) of $2.3bn, a rise of 42% from the previous year, on revenues that climbed by 21% to $7.9m.
RSA Insurance Group said it has made a good start to the year with strong performances in the UK, Canada and Latin America. Net written premiums in the first quarter of 2010 were 5% higher than in the corresponding period of 2009 at Ł1.9bn, or 3% higher at constant exchange rates (CER).
In the Press
Tidjane Thiam's days running the Prudential could be numbered if he fails to pull off the takeover of AIA, analysts warned. The chief executive is facing criticism after the company was hit with its second major embarrassment since he took over from Mark Tucker last September in a blaze of largely favourable publicity, says the Independent.
The Telegraph adds that institutions have threatened to derail Prudential's $35.5bn (Ł23.4bn) takeover of AIG's Asian business in protest at the insurer's "inept" handling of the bid after a key document was delayed on regulatory concerns.
The outlook for BP’s credit has been revised to negative by Moody’s to reflect the possible impact of its oil spill in the Gulf of Mexico. The move raises the possibility that the ratings agency could change its view of the company for the first time in a more than a decade, writes the FT.
Newspaper Tips
Put Logica among the likely losers from a hung Parliament. The Government is by far the biggest customer of the IT services provider in its home market, accounting for 62 per cent of last year’s UK sales. The company works on big-ticket technology projects for the Crown Prosecution Service, the Police National Database, the Department for Constitutional Affairs and the Ministry of Defence, among others. At 134źp — up 18 per cent since January — or 11 times current-year earnings, and providing a 2.6 per cent yield, hold on, says the Times.
When traders get to their desks on Monday, Liberty's place on the FTSE 100 will have been taken by its nationwide shopping centre business, Capital Shopping Centres, or CSC, while its London property unit will be run by a different company, Capital and Counties (C&C), which will struggle to make the FTSE 250. For those who have the stock, there is no reason to sell because it should provide solid enough returns for the moment. Hold, according to the Independent.
Rightmove's dominance cannot last for ever, not least because companies in its position find it all too easy to get complacent. And the shares are up by more than 40 per cent so far this year, trading on a toppish 18.6 times Canaccord's full-year forecasts. At that level they are fully valued, so avoid for now, says the Independent.
US close
US stocks ended sharply lower after a roller coaster day dominated by fears over Greece and possible debts problems for other European countries.
European Central Bank Governing Council member Axel Weber said there is a serious threat of Greece's problems spilling over to other eurozone countries. That’s why financial aid from the EU and IMF is justifiable to “fight off the danger for the stability of the euro zone,” he added.
On the economic front, private-sector employers added 32,000 jobs in April, according to figures from payroll-processing firm ADP.
Media giant Time Warner saw first-quarter earnings rise 10% to $725m thanks to increasing advertising revenues and strong DVD sales.
In contrast, News Corp says that its fourth quarter operating income will be lower than one year ago.
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