London pre-open: FTSE to inch higher early on

2nd Jan 2014 07:31

Today marks the return of many traders to the office after a quiet couple of weeks over the festive period. In the first day of trading in 2014, volumes are expected to pick up with the FTSE 100 set to kick the day off a couple of points higher than Tuesday's closing level of 6,749.09. According to Craig Erlam, Market Analyst at Alpari: "Things won't return to normal entirely until Monday, with a large number of traders likely to extend their holidays until the end of this week rather than return for a couple of days before the weekend. That said, we should see a substantial increase in trading volumes compared to what we've seen so far this week and last." This, he added, will be helped by a significant increase in the number of economic releases out today, starting with the release of the December manufacturing PMIs for the Eurozone and many of the region's countries. "For Germany, France and the Eurozone, this is a revised reading which will affect just how big an impact it will have on the markets. If the numbers are in line with the preliminary readings, the reaction will most likely be muted. However, any significant revision should prompt a response in the markets," Erlam said. "The readings from the other countries, such as Spain and Italy, have historically been low impact events but I still think they're worth keeping an eye on. These economies are still very fragile and any downturns could drag other countries down too, pulling the Eurozone as a whole back into recession. Early indications of this should come from these PMIs." Later on, the US will release its latest initial jobless claims figure, which is widely predicted to be on par with last week's number of 334,000. The country will also release two manufacturing PMI readings (the Markit and the ISM), which are forecast to come in at 54.4 and 57, respectively. In today's company news, IMI has started the new year on a positive note with the completion of the sale of its Beverage Dispense and Merchandising divisions. The divisions were sold for a combined value of $1.1bn, of which around £620m the company is planning to return to shareholders. The Chief Financial Officer of Debenhams will step down from his role on February 7th, the department store chain announced this morning. Director of Finance Neil Kennedy will step in while the company looks to find a replacement for Simon Herrick.FTSE 250 miner Ophir Energy failed to discover oil or gas in the first of its much-anticipated 'high impact' wells drilled offshore Tanzania in 2014. The highly prospective Mlinzi Mbali-1 well in Ophir's 80%-owned Block 7 was found to be water-bearing, a disappointing result in what is thought to be one of the largest prospects to ever be drilled in the region. NR