London pre-open: Footsie seen higher ahead of busy day

8th Dec 2011 07:20

 The Footsie is expected to open with moderate gains ahead of today's interest rate decisions by the Bank of England (BoE) and the European Central Bank (ECB). Investors will likely be cautious before the beginning of the crucial EU Summit later this evening, with many worried that it may not produce the goods that are expected.City sources predict the FTSE 100 will open up 33 points from yesterday's close of 5,547.With the BoE expected to freeze rates at 0.5% and leave its stimulus plans unchanged, an announcement by the ECB will likely take centre-stage given the severity of the current crisis in Europe, particularly as markets look ahead to the EU summit on Thursday evening. Following Mario Draghi's debut as ECB President last month in which he lowered rates from 1.5% to 1.25%, markets are generally expecting a further 25 percentage point cut to 1%, back to the level which was held from May 2009 to April 2011.A proposal by European leaders to double the region's firepower against the crisis lifted sentiment in European markets on Wednesday. However, these reports were quickly denied by a German government official. Reports out on Nikkei.com last night added to the speculation: Nikkei has said that the G-20 is proposing a $600bn fund for the International Monetary Fund to ease the troubles in the Eurozone.   In focus today will be oil titan Cairn Energy, which announced that it will return $3.5bn to shareholders following the completion of the sale of a 30% stake in Cairn India to Vedanta Resources for $4.1bn in cash, adding to the 10% stake Vedanta already bought in July for $1.4bn. Cairn now retains a 22% interest in the firm. "I am delighted to announce completion of this transaction which represents a major milestone in Cairn's history.  It crystallises the very significant value creation that we have delivered from our Indian business and allows us to return around three and a half billion dollars to shareholder," said chief executive Simon Thomson.Supermarket giant Tesco has seen group sales (including petrol) rise by 7.2% in thirteen weeks to 26 November (its third quarter), with like-for-like (LFL) sales growing by 2.6%. Asia saw a more subdued performance, with trading being hit by the flooding in Thailand and the warmest Autumn temperatures in northern Asia for 75 years. LFL growth was strong in the US at 11.9%. The group says it is trading broadly in line with expectations and maintained its outlook for the year.FTSE 100 quality and safety services provider Intertek has bought Labs & Testing for £1.3m, a provider of chemical, microbiological, non-destructive testing and environment services based in Chile. "This acquisition of L&T is another step in the strategic development of our South America offering," said chief executive Walhart Hauser.