London pre-open: FTSE to decline on tapering concerns

12th Dec 2013 07:27

- FTSE to fall on tapering concerns- US stock markets sink- Eurozone industrial production due out todayCity sources predict the FTSE 100 will open 26 points below yesterday's close of 6,507.72, dragged down by a poor finish across the Pond, where markets suffered steep losses on the back of concerns that a budget deal in Washington would remove one more obstacle standing in the way of a Federal Reserve's decision to taper stimulus.The Dow Jones Industrial Average, Nasdaq Composite and S&P 500 indices last night all registered their worst daily losses in over a month.Chief Congressional negotiators Senator Patty Murray and Representative Paul Ryan last night worked out a deal that would set spending at about $1.01trn in the current fiscal year, up from the $967bn required in a 2011 budget plan. The budget still needs to be passed in both the Senate and the House. If passed, it will end three years of impasse and fiscal instability in Washington that culminated in October with a partial government shutdown. The budget comes before a non-binding Friday deadline and more than a month before the January 15th date when existing funds to run many federal programmes expire.Also in the US, retail sales are expected to today show a rise of 0.6% in November, up from the previous month's 0.4% increase. Over in Europe, the Central Bank today publishes its monthly report and data on Eurozone industrial production. Eurozone industrial output may have climbed 1.1% in October, in line with the previous month's rate of growth, consensus estimates showed.In UK company news, WPP, the multinational advertising and public relations company, has agreed to acquire a majority stake in Social Lab, a social marketing agency based in Belgium, through its wholly-owned marketing communications network, Ogilvy & Mather. The transaction will allow the business to develop its online, social and mobile communications services, it said. Transport group Go-Ahead said its bus and rail divisions enjoyed a strong interim performance and, as a result, expects full-year results to come in a touch above previous expectations. "We continue to see a robust performance across both divisions and as a result of better than expected performance in our Southern franchise, our forecasts for the full year are slightly ahead of our previous expectations," the FTSE-250 group said in a company statement.Sports Direct's first-half underlying pre-tax profit was 16.9% higher than a year ago at £146.2m, driven by an increase in online and international sales. Group revenue in the six months ended October 27th came to £1.34bn, up 23.5% on the prior year. The Sports Retail arm delivered a strong performance with online sales up 43%, accounting for 15.5% of the division's revenues. International sports sales grew 30.8%.Energy services firm Wood Group said it has delivered "good growth" this year, despite trading remaining mixed across some markets. The company said that results for the 12 months ending December 31st are expected to be in line with expectations. It also predicts growth overall next year due to a mix of spending and contribution from completed acquisition, with trading in Wood Group PSN offsetting a reduction in Wood Group Engineering.NR