MARKET PREVIEW: FTSE 100 seen higher after US and Asian stocks climb

UK stocks are expected to rise in early trade, pacing overnight gains in US and Asian markets. The FTSE 100 is currently set to open at 5,904, up 14 points (0.25 percent) from Tuesday’s close.

Yesterday’s gains on Wall Street were driven by comments from Federal Reserve chairman Ben Bernanke, who testified before the Senate Budget Committee.

Bernanke told policymakers that the US jobs market has a long way to go to return to normalcy, while also noting that the unemployment rate, which declined for a fifth month in a row to 8.3 percent in January, reflects only those who are seeking work.

The Fed chairman’s comments revived hopes for another round of quantitative easing from the central bank to support the recovery, which faded after the Department of Labor reported that the US economy created 243,000 jobs last month.

Traders are now awaiting news from Greece, where Prime Minister Lucas Papademos will meet with party leaders for another round of talks on a new round of budget cuts.

Greece needs to pass further unpopular austerity measures in order to secure the next €130 billion bailout package from the EU, ECB and the IMF – collectively known as the Troika – and avert a disastrous default that could trigger a financial meltdown in Europe.

“Even if a Greek bond-swap deal is forthcoming, we might not get the bounce that participants are expecting. Instead we could chop around these levels, consolidating the gains of the last 6 weeks,” said chief market strategist at IG Group Chris Weston.

Across the Atlantic, the Dow Jones Industrial Average (DJIA) rose 33 points (0.25 percent) to 12,878 and the broader S&P 500 index added 2.5 points (0.2 percent) to close at 1,347.

Today’s US data will include weekly oil inventories from the Department of Energy. Analysts polled by Bloomberg forecast a gain of 2.5 million barrels in US crude stockpiles, indicating that energy demand in the US was in decline last week.

Likewise, Asian markets were in buying mode. Japan’s benchmark Nikkei 225 index stood 98 points (1.1 percent) at 9,015 and China’s Shanghai Composite Index rallied 54 points (2.35 percent) to reach 2,345 just before close of play.