London pre-open: FTSE to move slight lower at opening bell

2nd Jul 2014 07:44

UK stocks are expected to start on the back foot, ignoring new records set by US indices overnight as it slightly reverses some of yesterday's strong gains. City sources predict the FTSE 100 will slip two points lower than yesterday's close of 6,802.92. US stock markets started the second quarter in an optimistic mood, following the release of largely in-line readings on the state of the US manufacturing sector and general confidence of an upturn economic performance for the rest of the year. The Dow Jones was within kissing distance of the legendary 17,000-point mark, coming just a point away at one point during the trading session, but finished slightly further away to attempt to smash the mark another day.Alpari Market Analyst Craig Erlam said: "While at first glance it may appear that today is not looking as busy as Monday or Tuesday, that is certainly not the case. The economic calendar may look a little lighter, but that is simply because there is less noise, by which I mean fewer economic events that tend to have no, or minimal, market impact. There is, however, still a few important things to keep an eye on today. "The Eurozone first quarter gross domestic product reading will be released shortly after the European open and is expected to be unchanged at 0.2%, quarter on quarter, and 0.9%, year on year. While these are far from the growth levels most people would like to see, compared to what we've become accustomed to in recent years, I guess we should be grateful. That said, the benefits of all this austerity needs to start bearing some fruit soon or we may start to see more unrest in the countries that have been hit hardest by it." Also on the cards today is the Spanish unemployment reading, while later on the ADP non-farm employment and factory orders data are due out, as well as a speech from Fed Chairwoman Janet Yellen. In this morning's company news, Tullow Oil has reported a decline in profits on flat revenues in its first half and said it expects an exploration write-off of $415m. The company said the write-off was a result of "mixed" frontier exploration results in Mauritania, Ethiopia and Norway, as well as the decision not to renew certain licences. After a Norwegian tax credit of $110m, the net write-off is trimmed to $305m.Engineering and property firm Kier said its underlying performance for the year remains on course and is encouraged by its strong pipeline of opportunities. Kier said it made good progress across all its main division in the year ended June 30th 2014 and has a good visibility of earnings in 2015.Tough construction markets are hitting revenue at Carillion, but the support services and building group said orders are holding up strongly and it expects to start increasing revenue again this year.Following on from its UK housebuilding peers, Persimmon continued to sell more houses and at higher prices, although its forward sales revenue growth slowed from the first quarter. Total revenues have increased by 33% to £1.2bn and the group's average selling price increased by 4% to £186,000 due to a continued increase in the proportion of larger family houses in the sales mix.NR