London pre-open: FTSE to begin on weak note ahead of inflation data

14th Oct 2014 07:40

UK stocks are in line for another weak start on Tuesday, reversing the modest gains registered in the previous session.City sources predict the FTSE 100 will open around 28 points lower than Monday's close of 6,366.24.On Monday the Dow Jones Industrials Average ended the day with a loss of 223 points, which was mostly incurred in the last hour of trading - usually a poor sign. The trigger for the move appears to have been the widening rift between European Central Bank Mario Draghi and Bundesbank chief Jens Weidmann, a poor omen for the growth outlook in the single currency area. Airlines and consumer electronics led the way lower on the NYSE."This Tuesday looks set to start in very much the same vein as yesterday's session and the week seems to be moving the same ways as last week as US markets took another heavy fall," said Alpari market analyst James Hughes."However Asian markets have been somewhat mixed on the back of the US falls and are at least looking to stop the bloodbath, if not only briefly."The morning's focus will be firmly on the consumer price index (CPI) measure of inflation, which dropped to 1.5% in August. The figure is widely expected to register a further decline, to 1.4%. The retail price index (RPI) is predicted to fall from 2.4% to 2.3%.The BoE, which is targeting inflation of 2%, last week announced that it would keep interest rates at 0.5% amid price pressures.Looking across the Channel, Tuesday will see the release of euro-area industrial production figures, which are forecast to show a significant drop.Also on the agenda is the German ZEW survey, which is expected to show that the country's outlook on future growth have hit new lows.Back in the UK, Burberry's boss said the high end fashion group has "never been better prepared" for the all-important Christmas period after the company delivered double-digit underlying growth in the first half. Group revenues totalled £1.1bn in the six months to 30 September, up 14% on a constant-currency basis. "This has been a strong first half for Burberry, with sales growth of 14% reflecting our ongoing brand and business momentum," said chief creative and chief executive officer Christopher Bailey.Afren has fired Osman Shahenshah and Shahid Ullah with immediate effect for gross misconduct, the group has announced. It follows an investigation after the receipt of unauthorised payments from third parties were identified. The group has initiated legal proceedings against both men. Iain Wright and Galib Virani have also been fired after receiving payments that breached the company's approved remuneration policy.Revenue growth became flatter in the second quarter at Sabmiller due to a decline in lager volumes and weakness in China and Australia, with results also likely to be hit by currency headwinds. For the six months to 30 September, group net producer revenue (NPR) grew by 5% at a constant currency basis, slowing from 6% in the first quarter, while growth in group NPR per hectolitre was maintained at 3%.