London pre-open: Chinese data to provide a lift early on

1st Aug 2013 07:44

Markets are expected to open higher on Thursday morning ahead of central-bank policy decisions from the UK and Europe this afternoon, with sentiment helped early on by some upbeat data from China. City sources predict the FTSE 100 will open up 20 points from yesterday's close of 6,621.Growth in the Chinese manufacturing sector unexpectedly accelerated in July with the official purchasing managers' index (PMI) increasing from 50.1 to 50.3, beating the forecast of a fall to 49.8. The HSBC/Markit manufacturing PMI however fell from 48.2 to 47.7, as expected.Markets will also be digesting last night's policy decision by the Federal Reserve to keep its asset purchase programme unchanged. The Fed gave very little away, disappointing those who had hoped it would give an indication of when a 'tapering' of stimulus would actually begin. Instead, it said that the US economy is improving and that "downside risks" had diminished, but the overall tone was slightly dovish as it added that it would continue with quantitative easing (QE) in order to "support a stronger economic recovery".Policymakers also noted that inflation persistently below the 2.0% target "could pose risks to economic performance", which some took to suggest that QE could remain in place for some time yet. Stocks to watch Lloyds hailed a huge increase in underlying profits in the first half, helped by rising income and margins as well as reductions in costs and impairments. The bank reported an underlying profit of £2.90bn, up from just £1.04bn in the first six months of 2012. On a statutory basis, the bottom line swung to a profit before tax of £2.13bn, compared with a loss of £0.46bn previously.Aggreko, which supplies temporary power and temperature control, reported a 2.0% drop in pre-tax profits to £144m for the first six months due to poor trading its in Power Projects business. The Power Projects division's flat revenues and weak margins dragged down the group's overall performance, Aggreko said.Pharmaceuticals group AstraZeneca reported a 4.0% fall (at constant exchange rates) in second-quarter revenue to $6.23bn partly due to the loss of exclusive on several of its key brands. Core operating profits were down 10% at $2.06bn. BC