UK Stocks -- Factors to watch on Aug 26

Tue Aug 26, 2008 1:53am EDT

Stocks

LONDON, Aug 26 (Reuters) - Britain's FTSE 100 .FTSE index is seen opening 65 to 79 points lower on Tuesday, according to financial bookmakers, as lingering credit worries over the financial sector and slowing global growth weighed.

Stocks | Global Markets | China | Russia

U.S. stocks fell sharply overnight as credit concerns hounded financial stocks while global growth worries hurt big technology and industrial companies.

JPMorgan Chase (JPM.N) said the market value of its investments in Fannie Mae (FNM.N) and Freddie Mac (FRE.N) preferred stock has dropped by half to $600 million this quarter. [ID:nN251858]

In Asia, Japan's Nikkei average .N225 dropped 0.8 percent.

UK stock markets were closed on Monday for public holiday. The FTSE 100 .FTSE benchmark ended up 135.4 points, or 2.5 percent at 5,505.6 on Friday. "After yesterday's big sell-off on Wall Street, European equities are set to start the session well into negative territory with London being hit even harder as traders look to catch up after yesterday's market close," said Matthew Buckland, a dealer at CMC Markets.

Bank of England Deputy Governor Charles Bean warned on Monday that the global economic slowdown is likely to "drag on for some considerable time". [ID:nLP542632]

Adding to the gloom, a survey by the Confederation of British Industry showed profitability and optimism in Britain's dominant services sector deteriorated sharply in the three months to August. [ID:nLM709515]

The International Monetary Fund has trimmed its forecasts for 2008 and 2009 world economic growth, largely due to a marked worsening in the outlook for the euro zone, a G20 finance official told Reuters on Monday.

However, Singapore sovereign fund Temasek, which spent billions of dollars on shares in Merrill Lynch MER.N, sees value in banking stocks in the United States and Britain, a senior executive said. [ID:nSGC002237] * Financial worries drive Wall Street down 2 pct [nN25262012] * Nikkei pares losses, but mood remains dark [nT2608] * Asia stocks fall as financial crisis rolls on [nLQ052209] * Dollar gets lift from credit jitters, Ifo awaited [nT6792] * Oil above $115 on tropical storm, Russia tension [nT234801] * Gold bounces to track higher oil, eye on US data [nSP126724]

UK stocks to watch on Tuesday are:

LONMIN (LMI.L), AQUARIUS PLATINUM (AQP.L)

Aquarius Platinum has been in talks with South African miner Impala Platinum (IMPJ.J) about mounting a joint takeover bid for Lonmin, the Daily Telegraph said.

BRITISH ENERGY BGY.L

A takeover of British Energy by EDF (EDF.PA) is still the British government's preferred option for the nuclear generator, the Financial Times reported on Monday. [ID:nLP589599]

However, the Sunday Telegraph said British Energy's largest investor, Invesco, wants a merger between the nuclear power generator and British utility Centrica (CNA.L). [ID:nLO391971]

PRUDENTIAL (PRU.L)

China's central bank has bought a 1 percent stake in British insurer Prudential but not as a precursor to a takeover approach, the Sunday Telegraph newspaper said. [ID:nLO365450]

REED ELSEVIER (REL.L)

Bidders for the Anglo-Dutch publisher's trade magazine unit were allowed to re-bid last week, and bids came in slightly lower than in the first round, sources briefed on the matter said. [ID:nN25278662]

BHP BILLITON (BLT.L)

BHP Billiton, involved in a $128 billion plan to buy rival Rio Tinto (RIO.L), was asked by South Africa's Competition Commission on Monday to provide information to evaluate its bid. [ID:nLP674466]

Meanwhile, the miner has shut its giant Yandi iron ore mine in Australia until further notice while it investigates a fatality, the company said. [ID:nSYD56350]

BP (BP.L)

TNK-BP Executive Vice-President for Downstream Tony Considine resigned on Monday after five years heading the refining, trading and marketing businesses at BP's Russian venture, the company said. [ID:nLP599732]

RIO TINTO (RIO.L)

The miner is due to issue its first half results.

Rio Tinto's chief economist said that when activity was allowed to restart around Beijing, there would be a post-Olympics jump in commodities demand, according to the Financial Times.

He said Chinese domestic consumption and demand would remain resilient.

IMPERIAL ENERGY IEC.L

State-run Korea National Oil Corp (KNOC) has never expressed interest in buying Russia-focused Imperial Energy Corp, a KNOC source close to the M&A operations said on Monday. [ID:nSEO209323]

WOOLWORTHS WLW.L

Woolworths is to meet Malcolm Walker, chief executive of British food retailer Iceland, for new talks about a takeover of its retail business, British newspaper reported on Sunday. [ID:nLO401525]

AXON GROUP AXO.L

Infosys Technologies (INFY.BO) said on Monday it had agreed to buy the British consultancy for 407 million pounds ($753 million) as India's second-biggest software services exporter looks for growth beyond an uncertain U.S. market. [ID:nBOM284642]

BAE SYSTEMS (BAES.L)

Britain's risk losing its influence abroad unless it makes defence a bigger priority, according to Mike Turner, BAE Systems' chief executive, who also warned his company could be forced to consider leaving the UK if military spending ever declined below a "reasonable level", the Financial Times said.

TESCO (TSCO.L)

Tesco is on course to generate more than 500 million pounds from the sale of locally produced food and drink this year as Britain's biggest retailer cashes in on a surge in demand for regional products.

CAIRN ENERGY (CNE.L)