UK Stocks — Factors to watch on Oct 20

LONDON, Oct 20 (BestGrowthStock) – Britain’s FTSE 100 (.FTSE: ) is seen opening 10-19
points lower on Wednesday, mirroring global weakness as investors worried about
higher Chinese interest rates and souring U.S. mortgage bonds, with UK politics
also watched.

The blue-chip index is seen falling as much as 0.3 percent after it ended
0.7 percent lower on Tuesday to close at 5,703.89.

U.S. stocks (Read more about the stock market today. ) posted their biggest loss in two months on Tuesday on fears
banks might be on the hook for billions of dollars in souring mortgage bonds.

Asian stocks fell on Wednesday, with Japan’s Nikkei average sliding over 2
percent, as investors fretted that China may be embarking on a policy tightening
cycle after it surprised with its first interest rate rise since 2007, a factor
which had already hit UK stocks on Tuesday.

In the UK, investors will closely watch developments from Parliament where
the coalition government will unveil its much-anticipated spending review that
aims to cut public spending by 83 billion pounds between now and 2015.

Most government departments face cuts of about 25 percent over four years.

Contentious areas for cuts include welfare, defence and education, and any
strains in the coalition over divisive spending decisions will come under close
scrutiny. For full coverage, click on [ID:nLDE6720PZ]

Britain’s government may succeed in pushing through only half its planned
public spending cuts, and will be forced to raise taxes to keep its deficit
reduction strategy on track, a leading think tank says. [ID:nLDE69I2DQ]

Britain’s central bank releases the minutes from its Oct. 6-7 Monetary
Policy Committee meeting, at which it kept interest rates steady at 0.5 percent
and the stock of asset purchases unchanged at 200 billion pounds.

Some analysts expect to see a three-way split within the committee, with one
member, Andrew Sentance, reiterating his call for a 0.25 percent interest rate
rise and another, Adam Posen, wanting to extend the quantitative easing
programme.

The world is facing a dangerous trade war which could spark a 1930s-style
collapse unless policymakers can agree a common path on managing currencies and
demand imbalances, Bank of England Mervyn King said on Tuesday. [ID:nSLAJLE6FX]

Ex-dividend factors will take 1.86 points, with Smiths Group (SMIN.L: )
BSkyB (BSY.L: ) and BAE Systems all losing their payout attractions.

* Wall St drops as mortgage worries hit banks [ID:nN19152348]

* GLOBAL MARKETS-Asia stocks slide after China rate rise [ID:nSGE69J021]

* Nikkei down 2 pct on China rate hike, Wall St drop [ID:nTOE69J01E]

* China, Hong Kong property stocks fall on rate rise [ID:nTOE69J020]

* Dollar slips off highs hit on China rate rise [ID:nTOE69J02V]

* Oil up as reaction to China rate hike seen overdone [ID:nSGE69J03Q]

* Gold steady after sharp fall, bargain-hunting seen [ID:nSGE69J01E]

* Copper off lows; China rate move still weighs [ID:nSGE69J01S]

UK stocks to watch on Wednesday are:

BAE SYSTEMS (BAES.L: )

General Electric Co (GE.N: ), Honeywell International (HON.N: ) and United
Technologies (UTX.N: ) are among the suitors for BAE Systems’ aerospace unit that
could fetch up to $2 billion for Europe’s top defense group, people familiar
with the matter said on Tuesday. [ID:nN19135803]

BHP BILLITON (BLT.L: )

The miner is looking to address Canadian concerns about lost revenue from
its takeover bid for Potash Corp (POT.TO: ) after Saskatchewan province said it
would not back the miner’s $39 billion bid. [ID:nSGE69J05K]

RIO TINTO (RIO.L, BHP BILLITON

The miners signalled they will continue ramping up iron ore production
despite fresh concerns over a new Australian tax, with Rio Tinto approving a
$3.1 billion expansion plan on Wednesday. [ID:nSGE69J01W]

BHP BILLITON (BLT.L: ), RIO TINTO (RIO.L: ), XSTRATA (XTA.L: )

The miners are “considering walking away” from a resource profits tax deal
negotiated with the government because of a dispute over state royalties, a
newspaper said on Wednesday.

VEDANTA (VED.L: )

India has decided to halt Vedanta Resources’ plans to expand its alumina
refinery in eastern India, newspapers reported on Wednesday, after the
environment ministry found “serious violations” of green laws. [ID:nSGE69J04D]

VODAFONE (VOD.L: )

Verizon Wireless, a venutre of Verizin Communications (VZ.N: ) and Vodafone,
will start offering a lower priced mobile data service with limited downloads on
Oct. 28, according to a person familiar with the matter. [ID:nN19143920]

Vodafone is financially ready to pick up equity, the British telecom
operator’s chief executive said in published comments on Wednesday, when asked
about interest in increasing its stake in its Indian telecoms joint venture with
Essar Group. [ID:nBMA008650]

HOMESERVE (HSV.L: )

The head of the home insurance group said half its profits will be
generated overseas in the mid to long term as it sets its sights on growth
potential in the U.S. market. [ID:nLDE69I1D7]

HOME RETAIL (HOME.L: )

The retailer releases its first half results.

HOCHCHILD MINING (HOCM.L: )

The miner rleases its Q3 output data.

TODAY’S UK PAPERS

> Financial Times [PRESS/FT]

> Other business headlines [PRESS/GB]
(Reporting by Simon Falush)

UK Stocks — Factors to watch on Oct 20