FTSE preview: Gains ahead of Fed move

By Reuters
Updated: 06:06 EDT, 3 November 2010

The FTSE 100 is struggling for direction ahead of a crucial US fed decision on another stimulus, with Lloyds up as the City greets its new boss and Next down on a sales warning.

Eye on the market: Shares will rise today.

The Footsie lurched between positive and negative territory in early trading but by 10am was 2.83 points up at 5760.23.

Traders were on the sidelines due to uncertainty ahead of tonight's decision by the US Federal Reserve over the need for more stimulus measures.

Shares in Lloyds Banking Group bounced back today following the appointment of Santander's highly-rated UK boss as the bank's next chief executive.

Antonio Horta-Osorio will join taxpayer-backed Lloyds early next year before taking on the post currently held by Eric Daniels on March 1.

The appointment led to a turnaround in fortunes for Lloyds shares, which dropped 3% yesterday on growth fears following the company's third quarter update. Lloyds recouped much of Tuesday's loss to stand 1.5p higher at 68.9p.

The biggest rise in the top flight was achieved by car insurance group Admiral after a 28% rise in vehicle numbers and an increase in premium rates led to a 50% jump in third quarter turnover. With Admiral on track to meet profits forecasts, shares jumped 35p to 1662p.

Next shares slumped 4% after it warned of price rises at the upper end of its expectations and said it may not maintain overall sales growth at the upper end of its 0% to 3% guidance. Shares fell 89p to 2140p.

Defence firm Cobham was the biggest faller in the top flight, down 16.1p to 217.7p, after it signalled that growth in 2010 may not be as strong as hoped.

On Wall Street later today, the Dow Jones is seen opening slightly higher.