London pre-open: Firm drop forecast for FTSE

24th Sep 2012 07:24

City sources predict the FTSE 100 will open down 47 points from Friday's close of 5,853, weighed down by broadly lower trading in Asia, which has been affected by concerns over the Eurozone. There have been renewed concerns over the single currency region following France and Germany's failure to agree a schedule for initiating shared oversight of the Eurozone's banking sector. The US closed lower on Friday, with sentiment there also affected by the situation in Europe. There has been some positive speculation of late with rumours claiming that Spain has moved closer to accepting a bailout package. There are no significant UK economic data announcements due out today, while the main indicator to be released this week is the final second-quarter GDP reading, due on Thursday. Investors however will be watching the latest German IFO business confidence data out this morning. Also worth mentioning, a report in German weekly Der Spiegel holds that Eurozone authorities are again looking at ways to leverage the European Stability Mechanism (ESM) to over €2trn. Meantime, in the UK, Nick Clegg said on Sunday he would block any more spending cuts in this parliament, showing that the coalition is prepared to miss its borrowing targets rather than inflict more fiscal pain on the country.Lastly, judging by market commentary, concerns regarding the prospects for economic growth in Asia seem to be continuing to hang over stocks. In company news, fund manager Aberdeen Asset Management saw its assets under management (AuM) edge up in the first two months of the second half of the year. AuM at the end of August stood at £184.3bn, up from £182.7bn at the end of June. Gross new business during July and August totalled £6.1bn, but overall the group saw a net outflow of £0.1bn. Martin Gilbert, Chief Executive of Aberdeen, commented: "Our strong performance across a variety of capabilities and products means we remain well positioned to meet the needs of investors in a constantly changing environment." Mining giant Bumi said it was investigating allegations of financial and other irregularities at its Indonesian operations. The investigation centres on PT Bumi Resources, in which the company has a 29%. interest, with particular focus on that firm's development funds. "The extensive development funds in PT Bumi Resources Tbk and the one development asset in PT Berau Coal Energy Tbk were marked down to zero in the accounts of Bumi plc as at December 31st 2011, except for one investment with a carrying value of $39m in the consolidated financial statements," the statement said. Dairy Crest warned of lower first half profits, as challenging conditions continue, but said profit expectations for the full year ending March 31st 2013 remain unchanged. Mark Allen, Chief Executive, commented: "We are pleased with our first half performance despite the significant pressures on our business. Although we expect these to continue into the second half our first half performance together with our plans for the second half means that our profit expectations for the full year remain unchanged."Analysts at Bank of America Merrill Lynch have downgraded their view on shares of Anglo American to "neutral" from "buy".