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FTSE 100 seen higher as Wall Street recovers, commodities stay weak

8th Feb 2010, 7:31 am FTSE 100 seen higher as Wall Street recovers, commodities stay weak

The FTSE 100 is seen 20 points, or about 0.4% higher today following a recovery on Wall Street, where the main indexes ended the day on positive territory after a sharp early decline. The markets bounced back after Thursday’s huge selloff triggered by a worse than expected jobless claims update, which showed a rise of 8,000 for the previous week instead of a projected decline. Friday’s non-farm payrolls data from the Labor Department showed a decline, though the US unemployment rate fell from 10% to 9.7% to inspire some optimism and bring the markets back into the black.

The Dow Jones Industrial Average ended the day 0.1% higher, also recapturing the 10,000 mark. The broader S&P 500 index rose 0.3%, while the technology heavy NASDAQ composite was up 0.75%.

Asian markets were in bearish mode today as Hong Kong’s Hang Seng fell 1.1%, China’s Shanghai Composite Index was 0.15% lower, Japan’s benchmark Nikkei 225 declined 1% and South Korea’s KOSPI lost 0.9%. Australia’s S&P/ASX 200 went against the tide, posting a small gain.

The FTSE 100 lost 1.3% on Friday, dragged down by weak commodities, financials and ICAP’s (LSE: IAP) 19.5% decline after the interdealer broker cut its outlook. Bailed out bank Lloyds (LSE: LLOY) followed with a 5.7% loss, while private equity group 3i (LSE: III) and insurer Aviva (LSE: AV) shed more than 4%. Miners Xstrata (LSE: XTA) and Vedanta Resources (LSE: VED) dropped 5% and 4% respectively.

Just three FTSE 100 constituents gained more than 1%. Caterer Compass Group (LSE: CPG) was the runaway wined with a 5% climb, while defence systems manufacturer BAE Systems (LSE: BA) and commercial property company Liberty International (LSE: LII) were up 1.5% and 1% respectively.

Commodities

Oil prices fell sharply with March Brent Crude retreating to US$70.06/barrel, while US light, sweet crude was down to US$71.55/barrel.

Precious metals held steady with gold holding on to US$1,067/oz, while silver and platinum stood at US$15.14/oz and US$1,481/oz respectively.

Base metals advanced with cooper and nickel reaching US$2.91/lb and US$7.86/oz, while zinc rose to US$0.92/lb.

No economic data is due out today.

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