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FTSE 100 seen lower as US stocks close flat, oil, gold, silver and platinum rise

Last updated: 17:56 07 Jan 2010 AEDT, First published: 18:56 07 Jan 2010 AEDT

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Overview: the FTSE 100 is projected to start about 20 points or roughly 0.4% lower following a mixed session on Wall Street, where the main indexes finished flat on mixed economic data.

Investors got some jobs data to consider ahead of Friday’s non-farm payrolls report when the ADP (Automatic Data Processing) released its National Employment Report, putting private jobs cuts for December at 84,000, which signalled an improvement from 169,000 in November, though was roughly 10,000 more than expected.

Minutes of the December meeting of the Federal Reserve also sent mixed signals as some members appeared to be in favour of upping the scale of the US$1.25 trillion mortgage-buying programme instead of letting it expire as scheduled in March.

The ISM (Institute of Supply Management) released another report yesterday, saying its non-manufacturing index for December was at 50.1, signalling virtually no change from November, while an increase to 51 was expected.

The Dow Jones Industrial Average and the broader S&P 500 index ended the day flat, while the technology heavy NASDAQ composite lost 0.3%.

Asian markets were bearish on Thursday. Hong Kong’s Hang Seng and China’s Shanghai composite index both were 0.2% lower, Australia’s S&P/ASX 200 shed 0.1%, Japan’s benchmark Nikkei 225 index fell 0.5% and South Korea’s KOSPI index declined 1.3%.

The FTSE 100 finished with a marginal gain yesterday after stay below the opening level for the better part of the day. Software developer Autonomy Corporation (LSE: AU) emerged atop the leaderboard with a 6% climb, followed by heating and plumbing equipment manufacturer Wolseley (LSE: WOS) and part-nationalised bank RBS (LSE: RBS), which gained 4.7% and 3.6% respectively.

Marks and Spencer (LSE: MKS) was the heaviest faller after its like for like sales for the quarter failed to meet expectations. The stock tumbled 6.8%. Commercial property companies British Land (LSE: BLND) and Segro (LSE: SGRO) followed with losses of 2.5%. Oil and gas services company Petrofac (LSE: PFC) also shed 2.5% after getting downgraded by Morgan Stanley (NYSE: MS) from “equal-weight” to “underweight.” Other notable fallers included asset management firm Schroders (LSE: SDR), Home Retail Group (LSE: HOME) and National Grid (LSE: NG), which all lost more than 2%.

Commodities

Oil prices rose with February Brent Crude reaching US$81.39/barrel, while US light, sweet crude improved to US$82.65/barrel.

Precious metals advanced after the US Dollar showed further weakness following the Fed’s December meeting. Gold and silver advanced to US$1,133/oz and US$18.12/oz, while platinum reached US$1,548/oz.

Base metals also improved from yesterday’s levels. Copper and nickel rose to US$3.43/lb and US$8.46/lb as zinc reached US$1.19/lb.

Investors will be looking to today’s weekly jobless claims data that is due out in pre-trade in the US.

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