ftse to open down

FTSE set to trim Monday's gain; eyes on Abbey, mmO2
By Steve Slater

LONDON, Feb 4 (Reuters) - Britain's leading shares are expected to open lower on Tuesday to trim Monday's buoyant start to the month, as dealers said war and economic worries would make investors reluctant to jump back into the market.

MmO2 (LSE: OOM.L - news - msgs) was one of several companies to issue an update, and the mobile phone operator beat subscriber growth expectations, while bank Abbey National (LSE: ADVERTISEMENT

ANL.L - news - msgs) is also set to feature after selling its First National (ASQ: FNC - news) consumer lending unit for 848 million pounds.

Financial bookmakers forecast the FTSE 100 (^FTSE - news) benchmark index would open between five and 20 points lower.

The FTSE surged 122 points, or 3.4 percent, to 3,689.4 on Monday, bouncing back from a bleak January with its best one-day rally since early November. Insurers led the charge after the Financial Services Authority said it would consider relaxing rules on solvency margins.

Potentially supportive for equities were comments from Chancellor of the Exchequer Gordon Brown late on Monday. Brown refuted speculation that a black hole was about to appear in his budget and emphasised he is a pro-market reformer.

But the threat of war between the United States and Iraq continues to overhang the market, especially before a key speech by U.S. Secretary of State Colin Powell on Wednesday, expected to provide evidence that Baghdad was hiding banned weapons.

"Until we know a little bit more about what Colin Powell has to say, when we're going to war and what the ramifications are, you're going to find markets very nervous, probably for the next six weeks," said David Buik at financial bookmakers Cantor Index.

Gold prices leapt to a seven-year high on Tuesday as investors moved to the safe-haven due to the threat of war.

Wall Street held on to moderate gains on Monday, as strong U.S. manufacturing data lifted hopes economic growth will gather steam in 2003. The Dow Jones Industrial average closed up 56 points, or 0.7 percent, near to its level at the time of London's close. The tech-loaded Nasdaq Composite (NASDAQ: news) advanced 0.2 percent. But U.S. futures contracts slipped in overnight activity, raising the prospect of a weak opening on Wall Street.


ABBEY SELLS UNIT

Abbey National said it was selling First National to General Electric for cash. Abbey said the sale should have a positive impact on its capital ratios.

Mmo2 said it added 791,000 new subscribers in the third quarter, while delivering mixed growth in key average revenue in its two largest markets, Germany and Britain.

FTSE 100 industrial gases firm BOC Group (LSE: BOC.L - news - msgs) posted a dip in first-quarter pre-tax profit but said it expected to make progress in most of its businesses, despite the uncertain economic and financial environment.

Also issuing early updates or results were media company Chrysalis , Irish no-frills airline Ryanair and brewer Greene King (LSE: GNK.L - news) .