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FTSE 100 set for slow start

Published: 15:48 16 May 2014 AEST

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London’s blue chip index may have to wait another week to test its all-time high after a heavy fall on Wall Street overnight.

Early indications from financial spread bet firms point to a sluggish start in London, with only small gains expected from yesterday’s close of 6,841.

The Dow Jones Industrial Average had its worst day in five weeks with a drop of 167 points or one per cent after mixed economic data both in the US and also Europe. The broader-based S&P 500 shed 0.9% at 1,871 and the NASDAQ Composite fell 0.8% to 4,069.

US small caps were also hit hard, while there was a downbeat earnings release from retail giant Wal-Mart following the trough winter weather.

Wal-Mart profits fell in its latest quarter while sales grew at their slowest for five years.

Asian shares were mixed with heavy fall in Japan and Hong Kong, where a tumble by the US dollar hit sentiment. The Nikkei 225 is off 1.8% at 14,045 in Tokyo; by comparison, Hong Kong stocks are getting off lightly, with the Hang Seng down 0.7%.

The mood was different in India, where the Sensex index rallied more than 4% as early pointers from its recent election showed a landslide victory for the opposition BJP party.

The pace of UK company announcements eases off today, though housing will be in focus again with Bovis Homes set to complete a week of upbeat updates from the major builders.

Product testing specialist Intertek also gives a trading update having recently been upgraded to 'outperform' by Credit Suisse.

"We think organic growth rates have troughed and will accelerate during 2014 as headwinds in Commodities and Industrials abate," the Swiss broker said.

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