London pre-open: FTSE to fall on Fed concerns, Korea, Australia

12th Jul 2012 07:33

City sources predict the FTSE 100 will open down 29 points from yesterday's close of 5,664, as investors worry over whether the US Federal Reserve will increase stimulus after minutes from last month's meeting indicated that central bank judged that the economic situation would have to get worse for an intervention to become necessary. Nonetheless, market commentary following the release of the minutes suggested that it is questionable by just how much markets were truly surprised by that outcome. Adding to global growth concerns this morning are the unexpectedly weak employment figures down under, in Australia, and a surprise interest rate cut by South Korea´s central bank. These data points come ahead of tomorrow´s scheduled release of important economic data in the People´s Republic of China. The Farnborough Air Show continues to generate new orders for power systems developer Rolls-Royce, with the latest contract from Garuda Indonesia Airlines. The airline has placed an order for Trent 700 engines to power 11 Airbus A330 aircraft. The order includes long-term service support. As a result of this order Garuda Indonesia Airlines will have 24 A330 aircraft powered by Rolls-Royce Trent 700 engines by 2015.Revenue growth at Primark-owner Associated British Foods has been in line with the rate reported in the interim results, with the Sugar division the outstanding performer. Group revenue in the 40 weeks to June 23rd was up 11% on the corresponding period a year earlier, or 12% higher on a constant currency basis. In the final 16 weeks of that period year-on-year (y/y) growth quickened to 13%.Rio Tinto's long-standing Chief Financial Officer Guy Elliott is to retire at the end of next year, the group announced on Thursday, along with a few other senior management changes. Elliot has worked for the mining group for 32 years, which includes ten years on the board.