London pre-open: FTSE to open almost flat amid rising tensions

29th Aug 2014 07:40

With tensions between Ukraine and Russia once again mounting, UK stocks are set for only a very modest gain at Friday's opening bell. City sources predict the FTSE 100 will open around three points higher than yesterday's close of 6,805.80. According to images released by Nato on Thursday, Russian armed forces did enter Ukrainian territory, claims that Russia had denied. Earlier on Thursday, Ukrainian officials said Russian forces had entered the country and helped local separatists capture the coastal town of Novoazovsk in south-eastern Ukraine.Ukrainian president Petro Poroshenko said in a televised statement from Kiev on Thursday that he had convened an emergency meeting with his military chiefs as "the introduction of Russian forces into Ukraine has taken place". Meanwhile, overnight data released from Japan indicated the country had suffered a second month of weakness, offering what Alpari market analyst Joshue Mahony described as "yet another glimpse of the economy at a time where markets want to know if there is enough juice in the system for the Bank of Japan to reach their targets, along with the question of whether the sales tax continues to drag the economy down following it's introduction in April".Inflation dropped from 3.6% to 3.4%, which minus the sales tax puts it at 1.3%, compared to the target of 2%. The unemployment rate climbed from 3.7% to 3.8%, while retail sales, up 0.5%, offered a more positive figure, having risen for the first time since the sales tax was introduced in April. "This figure essentially represents the light at the end of the tunnel and thus the government will now gain some confidence that the impact upon the economy of such a move would generally take hold for around three months, Mahony explained. Housing market showing signs of slowdownHouse prices inched just 0.1% higher in August, according to Hometrack's monthly national housing survey.It was the second consecutive month that the gap between supply and demand narrowed, with the number of new buys down 0.9%, although this was largely due to seasonal factors. The narrowing meant that although average house prices continued to rise, the upward pressure was reduced. "This is increasing the amount of time properties are spending on the market and resulting in sellers having to accept larger discounts to the asking price to achieve a sale," Hometrack explained. Tesco anticipates profit fall of up to 27%The pressure is on for new boss Dave Lewis at Tesco after the struggling grocery giant said on Friday that it expects profits to fall by as much as 27% this year and its interim dividend to be cut by 75%. Lewis, due to take over from Philip Clarke who announced his resignation in July, will now join the group one month earlier than planned on 1 September.Sabsa, a wholly-owned subsidiary of drinks giant SABMiller, has completed the sale of its stake in Tsogo Sun through the placing of 293,896 shares and the sale of 7.78m shares. Tsogo Sun also repurchased the company's remaining 133.58m shares. Altogether, the disposal generated around $1bn. Road and rail haulier Stobart Group reported satisfactory trading in all its divisions, with biomass tonnages up in its energy division and higher passenger numbers in its airport business. But profits in its energy business were lower as a result of competition from exports and the end of a transport contract in February.NR