Morning all. Market reports:

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This is Money

Prices charged by manufacturers are rising at the fastest rate in almost 17 years - in the latest sign that inflation remains a major threat to the British economy. Factory gate inflation rose to 5pc in December, the Office for National Statistics said. The increase raises the likelihood of a future increase in wider inflation, the latest figures for which are released today.
Fastest rise for 17 years in factory gate prices

Retailers such as Ted Baker and N Brown enjoyed a bumper Christmas.
London stores sparkle amidst trading updates

The showdown on the high street over Christmas found the losers lagging well behind the winners as the City braced for a second salvo of crucial updates from some of the retail sectors biggest guns.
High noon on the high street

Last year, Japan was the only major market to end the year lower than it started, down 11pc. Since the credit crunch broke last summer, the Nikkei has fallen more than 20pc and 2008 has picked up where 2007 left off - dismally.
Time to bite the bullet and catch Japan train

Tighter controls on foreign companies seeking a London share listing and a relaxation in regulations for UK businesses have been suggested by the Financial Services Authority, in an effort to head off criticism about lax controls and provide a boost for the stock market.
FSA wants reform of listings rules

The US Securities and Exchange Commission (SEC) is investigating whether Merrill Lynch used knowledge about some of the share trades the brokerage conducted for its clients to make a profit on its own account. The US watchdogs probe centres on whether some current and former Merrill Lynch executives engaged in a practice known as "front running" which is when a brokerage receives a large order to buy or sell a particular share from a client and quickly executes its own trade in the same stock before addressing the clients transaction.
Merrill Lynch targetted in share investigation

NIKKEI	AUSTRALIA	SHANGHAI	HANG SENG

OUTLOOK Tesco to report strong Christmas trading as supermarkets prove resilientOUTLOOK Northern Foods trading could be hit by poor M&S salesOUTLOOK Northern Foods trading could be hit by poor M&S salesOUTLOOK Northern Rock investors hold key vote as nationalisation loomsTFN economic and business calendarAustralian shares close lower led by property trust sectorThomson Financial Europe AM at a glance share guide: Stocks mixed, oil up

Good morning traders!

In Asia today, the Hang Seng ended the morning down 309.11 points at 26,159.02,
while the Nikkei closed down 138.16 points at 13,972.63.

New York's main oil futures contract, light sweet crude for delivery in February, fell
1 cent to $94.19 per barrel.

Happy trading!

G.

Australian shares close lower led by property trust sector - UPDATE

TFN UK calendar and forecasts for today

OUTLOOK Northern Foods trading could be hit by poor M&S sales

London shares outlook - lower, awaiting UK CPI, Tesco Christmas sales figures

BROKERWATCH Legal & General cut to 'hold' vs 'buy' at Deutsche Bank, target 147pThomson Financial UK at a glance share guide

The Tuesday Press Roundup

BROKERWATCH Kingfisher at 'neutral' vs 'overweight' at JP Morgan, target to 144p

BROKERWATCH Sainsbury upgraded to buy vs neutral at Goldman Sachs, target cut

Tesco (TSCO) have announced like-for-like sales growth at 3.1% missing analysts' expectations - consensus was 3.5%-4.1%. Non-food and international sales did well. One analyst is suggesting a opening drop of 8-9%, Cantor is calling a 20p drop. The CFO is cautious on outlook.

Taylor Wimpey (TW.) is in-line with expectations, Cantor are calling it higher. Debenhams (DEB) are reporting strong Christmas trading, up 2.2% like-for-like, but for the 18-week period they were flat. They are cautious on outlook. Cantor is calling it 3p higher. Game Group (GMG) say like-for-like sales are up 31.9%. Venture Production (VPC) say they've encountered some problems in their trading statement, net daily production is down 7.7%. Autonomy's (AU.) deals of the day are with AT&T and BHP Billiton. The Northern Rock (NRK) EGM is today.

Among the small caps, solar cell manufacturer Jetion Holdings (JHL) say they are trading slightly ahead of expectations, but in the best traditions of London-list Chinese stocks, it looks like everyone already knew. Orwellian technology group Appian Technology (APN) has done deals worth 410k with British police forces. Leyshon Resources (LRL) have announced encouraging drilling results.

BP. have been downgraded to underweight from equal-weight by Lehman Brothers. British Land (BLND) have been downgraded to sell from hold in an SG Securities note on the sector. Legal & General (LGEN) have been downgraded to hold from buy with a 147 target by Deutsche Bank. Kingfisher (KGF) has been downgraded to neutral from overweight with a 144 target by JP Morgan. Sainsbury (SBRY) has been upgraded to buy from neutral with a reduced target of 440 from 465 by Goldman Sachs.

The FTSE is currently being called down 17 at 6,199 by CMC. Dow futures are currently being called down 59 at 12,719 after yesterday's 171 point rise. Asian markets have been very weak again.

STOCKWATCH Tesco seen down as much as 8 pct as sales miss analyst forecastsBROKERWATCH BP cut to 'underweight' from 'equal-weight' at Lehman Brothers

BROKERWATCH Fonciere des Murs, Metrovacesa, British Land downgraded at SG Secs

London shares open down; Tesco falls on below forecast sales growth, CPI awaited

UK smallcap opening - Yoomedia sharply higher on order win

UK smallcap opening - Mediazest firms on contract win

UK smallcap opening - Dmatek higher on upbeat trading update

UK smallcap opening - Dialight advances post trading update