London pre-open: FTSE drops after Chinese property data disappoints

24th Feb 2014 07:20

- Chinese property growth slower than predicted- Focus on Eurozone CPI reading- Additional 2trn dollar target set by G20 for economic growthThe FTSE is set to register a decline early on, dragged by a drop seen in Asia stocks overnight after Chinese property data showed a slower-than-expected rise. City sources predict the FTSE 100 will open 25 points below Friday's close of 6,838.06.For the first time in 14 months, average new home prices in the country's 70 major cities showed signs of easing, up 9.6% compared to a year earlier, compared to a 9.9% year-on-year climb registered the previous month. "There is a very real fear that the People's Bank of China will be forced to tighten lending related to property in a bid to slow down the rise in property prices," Alpari Market Analyst Craig Erlam explained. Meanwhile, over the weekend, a meeting of the G20 set an additional $2trn target for economic growth for the next five years, which it is hoped will increase the gross domestic product (GDP) of those countries by 2% above the currently expected levels. Back in the UK, the British Chambers of Commerce has called on Chancellor George Osborne to give greater focus to the unemployment level amongst 16 to 24-year-olds, saying a £100m scheme is needed to encourage companies to take on younger employees and offer apprenticeships. In Ukraine, a new interim President has been elected following the dismissal of Viktor Yanukovych. Temporary leader, parliamentary speaker Oleksandr Turchynov, has given MPs until tomorrow to form a new unity government. On the cards today is Eurozone CPI inflation, which on its preliminary reading showed it had declined to 0.7% last month, significantly below the European Central Bank's (ECB) target of 2%. Erlam commented: "Despite ECB President Mario Draghi's best efforts to convince the markets that inflation expectations in the long term are for the rate to return to 2%, the markets are not convinced and are growing increasingly concerned about the rapid rate of disinflation. Should we see another drop in the figure today, the ECB may have no choice but to act next week." Also on today's agenda is the February German Ifo business climate figure, which is predicted to have remained stable at 110.6.Bunzl acquires firms in Germany and Czech RepublicBunzl, the FTSE 100-listed distribution and outsourcing giant, has acquired businesses in Germany and the Czech Republic. The addition of two firms in Germany marked the company's first step into the cleaning and hygiene and healthcare sectors there, while the purchase of a disposable packaging firm in Prague has strengthened its position in the the Czech Republic. RSA Insurance issued a statement acknowledging recent press speculation regarding a potential rights issue and stated it was "considering" several options. The group said: "RSA is considering measures to strengthen its balance sheet, including raising capital by way of a rights issue, however no final decision has been made by the company at this time. Further details will be given when appropriate." Associated British Foods said it expects first half adjusted operating profit to be in line with 2013 as a slump in the Sugar business was offset by a strong performance from its Primark stores. The company's revenue and profit from Sugar will be substantially lower than last year, as prices declined. A reduction in European sugar prices ahead of regime reform in 2017, has been signalled for some time. The world sugar price has also fallen to an "unsustainably low level", putting further pressure on industry revenues and margins.Housebuilder Bovis Homes posted a 48% increase in pre-tax profit and said it was confident of achieving strong 2014 results.NR