London pre-open: Banks and China to keep rally going

13th Sep 2010 07:26

Blue chips are expected to push on higher first thing, extending last week's three-day winning streak to a fourth session following Basle III and bullish data out of China.Markets in the Far East have surged following news that Chinese industrial production jumped a better than expected 13.9% year on year in August, calming fears about the global slowdown. Meanwhile, a less stringent than feared Basle III decision by the European banking body is likely to get financials moving higher. The big players are ahead in Asian trade.Futures prices currently indicate a 60-point rally in London at the start of business.In company news, Tullow Oil's Owo field just got bigger, "significantly" extended by a sidetrack at the Irish firm's previously announced Owo-1 discovery, offshore Ghana. Results of drilling, wireline logs and samples of reservoir fluids at the well in the Deepwater Tano licence confirm that Owo is a "major" new oil field, Tullow crowed Monday. The Owo-1 well encountered 53 metres of net oil pay and the sidetrack, drilled in water 1,428 metres deep 0.6 km to the east, found an extra 16 metres of net oil pay in the lower part of the same channel system. AB Foods expects its underlying results this year to be well ahead of last time as retail business Primark continues to power ahead, while sugar profits have recovered. "Trading for the group since the half year has been strong resulting in a substantial increase in adjusted operating profit for the second half compared to last year," ABF said, adding "As previously indicated, earnings for the full year will show very good progress." Like-for-like sales growth of 6% is expected at Primark for the full year.BAE Systems is preparing to auction part of its British commercial aerospace business for as much as $2bn. Europe's biggest defence contractor has hired the American banks JPMorgan Chase and Wells Fargo to advise as it asks for first-round bids for two units by next week. These are believed to be one that builds hybrid propulsion systems for buses and lorries and another that sells aircraft engine controls for General Electric, the Times reports.