London pre-open: Eurozone uncertainty to hit stocks early on

15th Oct 2012 07:23

London's FTSE 100 index is expected to open slightly lower on Monday morning on the back of concerns over Eurozone finances.City sources predict that the Footsie will open down around eight points from Friday's close of 5,793. "Corporate earnings are likely to take a back seat this week ahead of the EU summit on Thursday and Friday," said market analyst Craig Erlam from Alpari."This could be a pivotal week for the Eurozone. Before the EU summit on Thursday, Greece is expected to submit its spending cuts worth €13.5bn to the EU leaders. If agreed upon by the EU, the next tranche of the bailout will be released, essentially funding Greece past November," he said.Significantly, according to Der Spiegel, the troika has suggested that Greece should be given two more years to implement budget cuts and reforms. Meanwhile, pressure continues to mount on Spanish Prime Minister Mariano Rajoy, who is widely expected to request a bailout from the European Central Bank (ECB) in the coming weeks. The focus is also on Portugal as it presents its 2013 budget. Also worth mention, China's exports rose at their fastest pace in 15 months during September, by 9.9 per cent year-on-year, the customs administration said on Saturday in Beijing, hitting a new record. The consensus estimate had been for an increase of 5.5%. Producer prices however dropped at a 3.5% year-on-year pace, below the 3.6% forecast, leading to some talk of deflation risks. In company news, part-nationalised lender Royal Bank of Scotland (RBS) has confirmed that Spanish banking giant Santander is going back on its agreement to purchase 316 RBS branches in the UK.Irish oil titan Tullow Oil is to take a stake in Block 9 (Tooq licence), Baffin Bay, north-western Greenland, which is operated by Maersk Oil. Tullow will take a 40% stake, putting its interest just behind Maersk's at 47.5%; Greenland's state oil company, Nunaoil, holds the remaining interest in the licence.AVEVA, the engineering data and IT systems group, said it has made 'good progress' in the first half, seeing solid revenue growth despite the impact of adverse foreign exchange rate movements. In its trading update for the six months to September 30th, the company said that, as usual, the financial year is more second half-weighted due to the number of large rental renewals and timing of customer spend.Analysts at Barclays have downgraded shares of BT to equalweight from overweight.BC