London open: Markets turn cautious ahead of risk events this week

3rd Apr 2013 08:41

Markets shrugged off some strong economic data from China on Wednesday morning to trade firmly in the red with traders nervous ahead of central bank meetings tomorrow and US employment data on Friday."European markets opened cautiously today as investors opted to mirror the lack of enthusiasm shown by traders overnight in Asia owing to a series of key events this week which could derail the bout of optimism within the markets," said Shavaz Dhalla, a Financial Trader at Spreadex."Thus, over the next few days control of the markets could swing quite sharply as investors could find themselves wrestling with a combination of events which may dictate sentiment."Both the Bank of England and European Central Bank (ECB) are due to release their monetary policy decisions on Thursday afternoon. While both parties are expected to stand pat, investors will be watching the press conference with ECB President Mario Draghi closely for any hints of a rate cut some time in the future.Meanwhile, the March employment report on Friday from the States isn't expected to be as exciting as February release, which showed an unexpected drop in the jobless rate and a whopping 236,000 increase in non-farm payrolls. Consensus estimates point to a further 199,000 rise in non-farm payrolls for March, though the unemployment rate is forecast to remain at 7.7%.Chinese services sector expansion continuesThe expansion in China's services sector picked up the pace in March, according to data published this morning. The government non-manufacturing purchasing managers' index (PMI) showed a rise to 55.6 from February's 54.5 reading.Meanwhile, the services PMI published separately by HSBC jumped to its highest level since last May, rising to 54.3 from the prior 52.1.Market Analyst Craig Erlam from Alpari said: "Strong figures here are essential if China is going to maintain growth rates at, or around, 8.0% this year, with demand for its exports remaining weak in some of its biggest markets due to the prolonged recession in the Eurozone and potential for lower spending in the US as the year goes on."FTSE 100: Ex-div stocks and miners provide a dragStandard Life was a heavy faller this morning after going ex-dividend, with investors now unable to get their hands on the insurer's final and special payout for 2012. Other ex-div stocks trading lower this morning included Hammerson, Pearson and RSA Insurance.Mining stocks were also in negative territory as metals prices slipped, with EVRAZ, ENRC, Fresnillo, Rio Tinto, Randgold, Polymetal and Anglo American all among the worst performers. Credit Suisse also put a dampener on share prices in the sector today after cutting target prices for several stocks. The broker said: "Despite more restrained spending, 2013/14 will be a period of price discovery, as markets move into surplus and the sector lives through the over-spend of prior years. We see downside risk to prices in H213 and this remains a challenging investment backdrop in the short run."In contrast, asset manager Schroders was performing well after Credit Suisse said that fund flow data for the UK mutual fund market showed equity inflows accelerating in February to their highest level in almost two years.Babcock, the UK engineering firm, was subdued despite saying that annual results will show "strong progress" on the previous year. The upbeat statement was being outweighed by a downgrade from Westhouse Securities from 'add' to 'neutral'.Vodafone was pulling back after its surge yesterday following Verizon's denial of a bid for the British telecoms firm. The Financial Times said yesterday that Verizon and AT&T were mulling a break-up bid of Vodafone at a 40% premium to current prices, causing shares to jump.ARM Holdings, the tech firm that designs chips for gadgets, edged higher after The Wall Street Journal reported that Apple could begin producing a new iPhone this quarter.FTSE 100 - RisersVedanta Resources (VED) 1,024.00p +3.23%Schroders (SDR) 2,202.00p +3.14%Reckitt Benckiser Group (RB.) 4,811.00p +1.37%Aggreko (AGK) 1,802.00p +1.24%Diageo (DGE) 2,109.50p +1.20%United Utilities Group (UU.) 714.50p +1.13%GKN (GKN) 269.20p +0.94%Severn Trent (SVT) 1,712.00p +0.71%ITV (ITV) 130.20p +0.70%National Grid (NG.) 783.00p +0.64%FTSE 100 - FallersEurasian Natural Resources Corp. (ENRC) 212.60p -9.65%Standard Life (SL.) 350.00p -5.48%Evraz (EVR) 206.30p -4.71%RSA Insurance Group (RSA) 112.30p -4.67%Randgold Resources Ltd. (RRS) 5,410.00p -3.22%Fresnillo (FRES) 1,322.00p -3.22%Rio Tinto (RIO) 3,005.00p -2.59%Polymetal International (POLY) 855.50p -2.40%Glencore International (GLEN) 351.70p -2.25%Anglo American (AAL) 1,636.50p -2.24%FTSE 250 - RisersRedrow (RDW) 200.20p +4.05%Pennon Group (PNN) 642.00p +2.72%Ashtead Group (AHT) 624.50p +2.55%Booker Group (BOK) 125.00p +1.71%Cable & Wireless Communications (CWC) 42.91p +1.47%United Drug (UDG) 279.70p +1.34%888 Holdings (888) 171.50p +1.30%Soco International (SIA) 387.80p +1.25%Jupiter Fund Management (JUP) 336.00p +1.20%Carpetright (CPR) 630.00p +1.12%FTSE 250 - FallersKazakhmys (KAZ) 347.90p -5.85%Centamin (DI) (CEY) 47.49p -4.35%Domino's Pizza Group (DOM) 597.50p -3.55%Petropavlovsk (POG) 198.00p -3.37%Ocado Group (OCDO) 154.40p -3.14%Ferrexpo (FXPO) 160.30p -2.97%Hochschild Mining (HOC) 262.20p -2.89%Lonmin (LMI) 278.50p -2.89%African Barrick Gold (ABG) 181.90p -2.88%Alent (ALNT) 368.50p -2.59%BC