London pre-open: FTSE to extend yesterday's decline

8th Apr 2014 07:40

Stocks are set to continue in a negative fashion this morning, dragged by declines seen around the rest of the globe. City sources predict the FTSE 100 will open nine points than yesterday's close of 6,622.84, when the index fell 73 points. US stocks declined for a third straight day on Monday with high-growth, 'momentum' shares continuing to bear the brunt of the selling pressure.Notably, the Nasdaq again experienced the heaviest falls, dropping 1.2% to below its 100-day moving average as technology shares extended last week's losses. Over the past three days, the index has lost 4.6% of its value, the worst three-day skid since November 2011.The picture was a little more mixed in Asia, although Japan's Nikkei 225 was down 0.9%. As noted by Spreadex's Lee Mumford, "healthcare and technology stocks remained under pressure in Japan whilst Chinese stocks climbed to a six-week high on speculation the government will take steps to bolster economic growth". "With speculation the government will introduce measures to stabilize growth; investors will be keeping a very close eye on Chinese data in the coming weeks," he added. The situation over in Eastern Europe is unlikely to aid sentiment, with pro-Moscow protesters currently occupying Ukrainian government property have demanded their own referendum on independence, sparking renewed warnings from US officials on the escalation of tension by the Russians. The heightened tensions prompted US Secretary of State John Kerry to announce plans for a meeting with with Russian, Ukrainian and European powers within the next 10 days. Promisingly, Russian Foreign Minister Sergei Lavrov has reportedly spoken on the telephone to Andriy Deshchytsia, his Ukraine counterpart - the first time this has occurred in any significant way since the crisis broke out. UK salaries rise but skills shortage may hit recoveryMeanwhile, back in the UK, full-time wages are rising at their fastest for seven years, but a skills shortage and immigration restrictions could hold back an economic revival, a report out this morning said.Starting salaries for people in permanent jobs increased at their sharpest rate since July 2007, according to a survey from accountancy firm KPMG and the Recruitment & Employment Confederation.Elsewhere in the world, today's agenda includes The Bank of Japan's (BOJ) latest monetary stimulus decision, which is expected to remain unchanged.The central bank is forecast to maintain its 60trn yen to 70trn target for yearly expansion of the monetary base.In France, the government under Prime Minister Manuel Valls will face its first vote of confidence in the National Assembley.Ahead of the vote, France tried to reassure Germany that it would stick to promised deficit reductions and step up economic reforms to accelerate sluggish growth.Finance Minister Michel Sapin on Monday told his German counterpart Wolfgang Schaeuble that they would take tough decisions to overhaul the economy.Meanwhile, the International Monetary Fund will release its twice-yearly World Economic Outlook which is expected to reveal an increase in global growth estimates on the back of expansion in advanced economies.In this morning's company announcements, Ferrexpo's first quarter iron ore pellet production rose 9.2% to 2,714,000 tonnes compared to a year ago. The miner also increased the proportion of higher grade pellets at 65%, up by 320,000 tonnes or 31%.Model railway and Scalextric car maker Hornby warned that a £0.2m exchange rate loss will lead to a £1.2m loss overall but on an operating level it has traded in line with company expectations in the last quarter. The group said it expects to deliver a performance for the year around breakeven at the underlying pre-tax level as indicated in the last trading update.Renold is on track to hit full-year targets as its turnaround strategy and restructuring moves forward, with trading in both its divisions and group net debt in line with management expectations.Polymer group Victrex said it experienced a better-than-expected second quarter, but warned that currency movements will have a worse impact on results this year and the next.NR