London stock market looks for solid gains

London investors would likely look to "defensive" shares this week for solid gains on the capital's stock market, analysts said. The FTSE 100 index of leading London shares closed at 4,886.5 points on Friday, down 32.4 points, or 0.66 percent, since the previous week. "Sentiment has taken a turn for the worse and suddenly it has not been easy to make money in the UK equity market this year," said Mike Lenhoff, strategist at Brewin Doplhin Securities. "Unless portfolios were stuffed with pharmaceuticals, tobaccos, oil and gas, Allied Domecq, or International Power - defensive shares - investors will have probably been disappointed with the outcome to date," he added.
Meanwhile, five quarter-point increases in British interest rates between November 2003 and August last year have taken their toll not just on British consumer spending, but also on the stock market.
"The impact of higher (British) interest rates on the housing market, borrowing and spending has played a big part and is now reflected in the poor performance of sectors like household goods, general retailers and leisure and hotels," Lenhoff added.
On the corporate news front, this week sees a smattering of companies unveiling results.
Of particular note is Marconi, which recently said it would axe 800 British jobs after failing to win a crucial contract.
The telecoms equipment maker was to publish its annual results on Tuesday, along with British airports operator BAA.
British supermarket group Sainsbury reveals its annual numbers on Wednesday, the same day as mobile phone company O2.
On Thursday, annual results were due from British telecommunications giant BT Group, brewer SABMiller and the London Stock Exchange (LSE).
The market would likely focus on developments regarding pan-European stock exchange Euronext's bid to gain control of the LSE, analysts said.
On the economic data front, British inflation figures were due out Tuesday, unemployment data on Wednesday and sales numbers Thursday.
Investors would also examine the BoE's minutes from its latest rate-setting meeting, released Wednesday, after the central bank opted to freeze rates at 4.75 percent in its first decision since British Prime Minister Tony Blair's historic third election win.