London pre-open: FTSE to move lower ahead of data releases

2nd Dec 2013 07:21

- FTSE to drop 13 points- Chinese PMI beats expectations at 50.8- UK Manufacturing PMI due out laterCity sources predict the FTSE 100 will open around 13 points lower than Friday's close of 6,650.57, ahead of a several important economic data releases due out today and as markets get back on track after the Thanksgiving holiday closed US markets for a day and a half at the end of last week. News out over the weekend included HSBC Chinese PMI, which beat expectations with a reading of 50.8 (October: 50.9), the second highest level recorded in the past eight months. A reading of 50.5 had been predicted. Hongbin Qu, Chief Economist of HSBC's Chinese division, said: "China's manufacturing sector kept relatively steady growth momentum in November, as the final manufacturing PMI was revised up from the flash"reading on the back of faster new business gains."Chancellor George Osborne pledged to reduce the average energy bill by around £50 each year by passing on the cost to the government, which it plans to pay for by its war on tax avoidance.Osborne this week also told the BBC that the country must endure several more years of government spending cuts and tax hikes to address its budget. He said: "In the Autumn Statement I will say the job is not yet done because we have got to make sure we go on taking the difficult decisions to secure the recovery. We want a responsible recovery."Meanwhile, discount supermarket Lidl has unveiled plans to more than double its store number from 600 to 1,500. In an interview with the Sunday Telegraph, Lidl is planning to expand at a rate of at least 30 news stores a year, its regional Managing Director revealed. On the agenda today is UK Manufacturing PMI, which is expected to rise slightly to 56.1 from 56. Announcements expected from abroad include US Construction Spending, ISM Manufacturing, and ISM Prices Paid, along with EU and Germany Manufacturing PMI.In this morning's company news, Polymetal International revealed it has entered into a five-year facility agreement with JSC Sberbank of Russia. The $400m funds will be drawn down to repay its existing loans and to finance ongoing operations. The loan, which is repayable in a bullet payment in five years, is expected to result in a significant improvement of the group's debt maturity profile now extending to more than three years. St. Modwen Properties said its joint venture with Salhia Real Estate Company has completed the sale of the Elephant & Castle Shopping Centre to Delancey and APG for £80m in cash. The joint venture, Key Property Investments, had acquired the retail, leisure and office complex of 327,000 sq ft in May 2002 for £29.25m. The sale price represents a yield of 4.25% and is significantly above the asset's current book value.Aerospace manufacturer Senior has bought Thermal Engineering Holding for £28.3m. Senior has bought Thermal, which supplies global jet engine and airframe manufacturers and their major suppliers, from Privet Capital and other shareholders.Aviation services and distribution firm John Menzies announced on Monday that its newspaper and magazine wholesaling division has renewed and renegotiated contract terms with Trinity Mirror Group. Menzies Distribution has secured a new agreement which will see it continue to distribute the Mirror's portfolio of newspapers across the UK, as well as taking on distribution of Teeside Gazette.Meatpacker Hilton Food said it has signed a new agreement with Tesco for the increased supply of packed fresh meat products in the UK from its facility near Huntingdon. Under the new agreement, which runs until February 2019, Hilton will make an additional investment to raise volumes and introduce new state of the art technology within the facility, it explained.NR