British banking stocks will remain in the spotlight next week, with results from HSBC and Royal Bank of Scotland set to instil some confidence in the sector or add to concern about low growth and bad debts.
Shares in UK banks fell this week after Barclays increased its bad debt provisions and Lloyd's TSB issued a downbeat outlook, compounding fears about slow growth in the sector.
"Banks are a consumer-facing sector in many respects so the weakness there is telling us something," said NatWest Stockbrokers' head of research, Mr Jeremy Batstone.
Chartists said the FTSE 100 share index had seen the 2002 trough after it reached a six-year intraday low of 3,626 in the previous week.
HSBC investors will be keen to hear some positive news on Monday after the global banking giant made cautious noises about the outlook at May's annual general meeting.
Mr Graham Secker, equity strategist at Morgan Stanley said that although much of the bad news in the sector had been priced into shares of HSBC, global economic weakness could still exert downward pressure.
This week's pile of US data cast doubt on the pace and extent of the recovery in the United States, leading some commentators to forecast the country would lurch into another recession.
Mr Secker added that since he had lowered his UK growth forecasts for 2002 and 2003, he was turning more cautious on the overall banking sector.
Asian-focused bank Standard Chartered is expected to report a sharp rise in bad debt charges when it reports first half results next Wednesday.
Insurer Royal & Sun Alliance will also be closely watched on Thursday for signs that its disposal programme to raise 800 million pounds ($1.26 billion) is on track.
Shares in the general insurer fell sharply yesterday amid persistent speculation it may have to resort to a rights issue to raise cash. The company declined to comment.
Investors were also bracing themselves for full-year results from diversified mining giant BHP Billiton, which are expected to show that weak commodity prices had eaten into profits.
Other blue chips due to release results include gas and vacuum technology firm BOC, publisher Reed and engineering firm GKN.
Economic news takes a back seat to corporate news, although investors will turn with interest to US consumer borrowing figures for signs consumers may be faltering as a prop for the economy.