London pre-open: Firmer start expected

16th Oct 2012 07:29

UK stocks are set to rise strongly when markets open on Tuesday with city sources predicting that the FTSE 100 will open up around 33 points from yesterday's close of 5,806. Markets finished with just slight gains on Monday despite some better-than-expected US retail sales data and decent third-quarter figures from banking giant Citigroup.Market analyst Craig Erlam from Alpari said this morning: "This just shows that the Eurozone is still at the forefront of everyone's minds this week. The EU summit on Thursday and Friday is all investors seem to care about at the moment. It is not often that we see such positive retail sales data and corporate earnings completely ignored."Portugal has been hit by protests after it revealed its 2013 budget yesterday which includes tax rises and spending cuts and is likely to see the country fall into its third year of recession.Meanwhile, the Spanish government is preparing to make a request for aid, according to an article in the Financial Times last night. Bloomberg is also casting a spotlight on Spain today. It reports that Spain's PM believes that holding out for longer will win the country better terms. Meantime, S&P has further cuts its long term credit ratings on 11 Spanish banks and short term rates on four.All of the above ahead of an auction of Spanish short-term debt scheduled for later this morning. In the UK, ONS releases September inflation data at 09:30 (consensus: 2.2% year-on-year, last: 2.5% year-on-year). The September producer price indices will also be released at 09:30 (consensus: 0.2% month-on-month, last: 2.0% month-on-month).Diversified mining group Rio Tinto has hailed a strong set of production results in the third quarter, with iron ore, copper, bauxite, alumina, and titanium dioxide output up year-on-year. "As we said at our Investor Seminar last week, markets remain volatile, but our business is resilient and our operations are performing strongly, reflecting our consistent strategy of running large, long-life, cost-competitive operations," said Chief Executive Tom Albanese.Global engineering firm GKN warned that macroeconomic conditions have deteriorated in recent weeks and it was seeing evidence of softening in order books. This was particularly evident in European automotive and industrial markets, it said. Fresnillo said it was on track to hit silver and gold production targets for 2012 and had had a record year of gold production so far. The miner announced attributable gold production of 375,637 ounces in the first nine months of the year, a 15.1% increase over the same period of 2011.