International Markets: London - UK watches Asia

UK STOCKS are likely to be mixed this week as concern that Asia's turmoil may undermine profits for some companies offsets optimism that interest rates are unlikely to rise soon. Bonds are expected to be little changed, as economic reports are not expected to provide clues about the future of interest rates.

Marks and Spencer and Zen- eca Group will make statements on current trading, while WH Smith releases first-half results including the Christmas season.

The FT-SE 100 index fell 1.55 per cent on the week to 5,181.4. The FT- SE Oil Integrated index led the decline, down 7.4 per cent on the week as oil prices appear to be headed even lower. London crude fell 3.1 per cent to $14.78 on Thursday, its lowest level since April 1994. Prices have fallen 25 per cent in the three months amid fears that lower Asian demand, higher production and further oil sales will result in a glut of crude.

Music group EMI said on Friday that its annual operating profit will miss expectations by up to pounds 25m because of setbacks in the slowing economies of the Asia-Pacific region. Investors will be watching for other evidence of the effect of Asian economic turmoil. US equities have slipped on Asia's decline, as some companies reported lower-than-expected earnings. This, coupled with the misconduct allegations against President Bill Clinton, could drag down US stocks and pull UK shares down in their wake.

Marks and Spencer's Wednesday statement could show a lower-than-expected increase in sales, particularly over Christmas.

Last week's retail sales report, which showed that sales at stores and supermarkets unexpectedly fell 0.1 per cent in December, dashed hopes that holiday shopping had begun slowly and then surged. The drop makes it less likely that interest rates will be raised next month.

Evidence that the British economy is growing sustainably, and that a series of interest-rate rises will not be needed, failed to boost stocks. Economic figures due out next week include M4, Britain's broadest measure of money supply, an industrial trends survey, international trade figures and a consumer credit report.

Wednesday sees the auction of pounds 2bn of new 30-year gilts. The benchmark 10-year government bond yield rose 1 basis point to 6.06 per cent on Friday. The yield on the March short sterling futures contract - a measure of UK interest rate expectations - fell 6 basis points to 7.44 per cent, suggesting investors think official interest rates have peaked.

However, despite this leading indicator, together with economic data making an increase next month less likely, some analysts are not yet confident that the top of the interest-rate cycle has been reached.

"The jury is still out on rates," says Tony Turner, an investment manager with Norwich Union. "We're either at or very near the peak. It's a very fine decision."

Copyright: IOS & Bloomberg

PROMOTED VIDEO
Life and Style
Sainsbury's could roll the lorries out across its whole fleet if they are successful
tech
Arts and Entertainment
tv
Sport
Ojo Onaolapo celebrates winning the bronze medal
commonwealth games
Arts and Entertainment
Rock band Led Zeppelin in the early 1970s
musicLed Zeppelin to release alternative Stairway To Heaven after 43 years
Arts and Entertainment
High-flyer: Chris Pratt in 'Guardians of the Galaxy'
filmHe was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star
Arts and Entertainment
'Old Fashioned' will be a different kind of love story to '50 Shades'
film
Life and Style
fashionHealth concerns and 'pornified' perceptions have made women more conscious at the beach
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Arts and Entertainment
Tracey Emin's 'My Bed' is returning to the Tate more than 15 years after it first caused shockwaves at the gallery
artTracey Emin's bed returns to the Tate after record sale
Arts and Entertainment
Smart mover: Peter Bazalgette
filmHow live cinema screenings can boost arts audiences
Environment
Neil Young performing at Hyde Park, London, earlier this month
environment
News
i100
News
Prince Harry is clearing enjoying the Commonwealth Games judging by this photo
people(a real one this time)
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Project Manager (HR)- Bristol - Upto £400 p/day

£350 - £400 per annum + competitive: Orgtel: Project Manager (specializing in ...

Graduate / Trainee Recruitment Consultant - IT

£25000 per annum + OTE £40,000: SThree: Orgtel are seeking Graduate Trainee Re...

HR Business Partner - Banking Finance - Brentwood - £45K

£45000 per annum + Benefits: Ashdown Group: ** HR Business Partner - Senior H...

PA / Team Secretary - Wimbledon

£28000 - £32000 per annum + Benefits: Ashdown Group: PA / Team Secretary - Mat...

Day In a Page

Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star
How live cinema screenings can boost arts audiences

How live cinema screenings can boost arts audiences

Broadcasting plays and exhibitions to cinemas is a sure-fire box office smash
Shipping container hotels: Pop-up hotels filling a niche

Pop-up hotels filling a niche

Spending the night in a shipping container doesn't sound appealing, but these mobile crash pads are popping up at the summer's biggest events
Native American headdresses are not fashion accessories

Feather dust-up

A Canadian festival has banned Native American headwear. Haven't we been here before?
Boris Johnson's war on diesel

Boris Johnson's war on diesel

11m cars here run on diesel. It's seen as a greener alternative to unleaded petrol. So why is London's mayor on a crusade against the black pump?
5 best waterproof cameras

Splash and flash: 5 best waterproof cameras

Don't let water stop you taking snaps with one of these machines that will take you from the sand to meters deep
Louis van Gaal interview: Manchester United manager discusses tactics and rebuilding after the David Moyes era

Louis van Gaal interview

Manchester United manager discusses tactics and rebuilding after the David Moyes era
The children were playing in the street with toy guns. The air strikes were tragically real

The air strikes were tragically real

The children were playing in the street with toy guns
Boozy, ignorant, intolerant, but very polite – The British, as others see us

Britain as others see us

Boozy, ignorant, intolerant, but very polite
Countries that don’t survey their tigers risk losing them altogether

Countries that don’t survey their tigers risk losing them

Jonathon Porritt sounds the alarm
How did our legends really begin?

How did our legends really begin?

Applying the theory of evolution to the world's many mythologies
Watch out: Lambrusco is back on the menu

Lambrusco is back on the menu

Naff Seventies corner-shop staple is this year's Aperol Spritz