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EQUITY MARKET INSIGHTS

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Sentiment in the London Stock Exchange was boosted at the end of last week by the Abbey National's decision to trim...
Sentiment in the London Stock Exchange was boosted at the end of last week by the Abbey National's decision to trim its mortgage lending rate by 0.35% to 7.99%.

Some dealers believe that the Abbey's action could herald a slight easing of interest rates in the short-term, although many interpreted the move as a response to the weak housing market and an attempt to increase market share.

By the close of trade on Friday the FT-SE 100 index had regained much of its lost ground, re-establishing a position ahead of the 3,500 mark at 3,509.4.

However, over the week as a whole the index fell 15.5 points, reflecting worries about the possibility of poor profits releases from UK companies.

Disappointing results from Roll-Royce on Thursday were taken badly by the market and, with the Autumn reporting season getting into full-swing, traders are becoming concerned about the effect of the economic slowdown on company margins and turnover.

There is not expected to be much reaction to a 'no change' monetary meeting between the Chancellor and the Governor of the Bank of England this Thursday, with the vast majority of City traders expecting interest rates to remain at 6.75%.

Results due this week:

It is a bumper week for company results, and the ones that the market will focus upon are:

Glaxo-Wellcome: The world's biggest drugs company publishes interim results on Thursday. There is expected to be some slowdown in sales growth and major jobs cuts are likely following Glaxo's £9bn take-over of Wellcome.

British Gas: Second quarter results are published on Thursday and a healthy rise in shareholder dividends is expected.

Blue Circle: The UK's biggest cement manufacturer is expected to announce healthy half-year profits following market share growth. However, there is expected to be a warning about future profits as the UK construction industry moves back into recession.

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