London pre-open: FTSE to begin week with a slow start

13th Jan 2014 07:29

City sources predict the FTSE 100 will open 13 points higher than Friday's close of 6,739.94, as investors weigh up last week's US jobs data and a mixed performance by Asia stocks overnight.  According to Craig Erlam from Alpari, the fact stocks are set to move higher early on "suggests that we're still stuck in a very unusual environment in which investors can't decide what is actually more beneficial for the stock markets, positive fundamentals or more quantitative easing". He continued: "Given that they appear to be rallying off either, I guess at this stage they're not overly bothered. As long as they have an excuse to buy on the dips and continue to benefit from rising share prices, that's all they're concerned about."While it is looking rather light on macro news this week, a number of companies will be putting out important announcements, with a particular focus likely to be on retailers. Ocado, Home Retail Group, Dixons and Associated British Foods (which owns Primark) are all expected to post positives Christmas trading sales. The focus this week will also be on the financial sector. "As we saw in the previous quarter, this is expected to be the best performing sector in this earnings season, which should mean earnings season getting off to a very positive start," Erlam said. "[...] Large amounts of earnings growth is still being driven by cost-cutting, with low levels of lending and smaller margins, among other things, weighing on profits." In other news, over the weekend the controversial minerals export ban came into being in Indonesia, sending metal prices higher. Chancellor George Osborne is set to say on Thursday that Britain should remain in a reformed EU and that because the country is at the top of the economic growth league, the agenda for reform is gaining strength. In this morning's company news, Sports Direct has snapped up a stake in High Street peer Debenhams and has signalled its desire to work with the department store to create value for its shareholders. In a short statement on Monday morning, Sports Direct said that it has acquired 56.8m shares in Debenhams, representing a 4.63% interest in the company.AstraZeneca's diabetes drug Farxiga has been approved by the US Food and Drug Administration. The drug, which AstraZeneca developed with Bristol-Myers Squibb, is a once-daily oral treatment to improve glycaemic control in adults with type 2 diabetes mellitus. Oil engineering group Amec has agreed a £1.9bn deal to take over rival Foster Wheeler. Amec said it had agreed outline terms for a recommended cash and share offer under which Foster Wheeler investors would receive about 0.9 new AMEC shares and $16.00 in cash, together representing $32.00 for each Foster Wheeler share.Balfour Beatty, the FTSE 250 infrastructure group, has been appointed preferred bidder on the BC Children's & BC Women's Redevelopment Project in Canada. The £196m project will see Balfour invest £9.2m, equal to 70% of the equity required. It will begin construction in April, with completion expected June 2017. Pubs, restaurants and hotels business Greene King said trading over the key Christmas and New Year period has been very strong and remains confident momentum will continue. Retail like-for-like sales rose 5% in the last six weeks and 3.8% year-to-date. Average earnings before interest, taxes, depreciation, and amortisation (EBITDA) per pub in Pub Partners rose 5.6%.NR