London pre-open: FTSE to open lower after Chinese data disappoints

3rd Feb 2014 06:53

City sources predict the FTSE 100 will open eight points below Friday's close of 6,510.44, as concerns mount over this week's interest rates decision by the European Central Bank (ECB). Following Friday´s weaker-than-expected reading on Eurozone consumer price inflation, at least a handful of the largest research outfits in Europe changed their predictions for the upcoming policy meeting. They now see another cut in the ECB's main policy rate coming.Investor confidence is also likely to be knocked by a downbeat performance by Asia stocks, which saw markets suffer a sharp drop following data from China, which revealed poor monthly manufacturing data, and a poor performance in the US at the end of last week. Despite pulling off their intraday lows, US markets suffered steep falls on Friday on the back of ongoing concerns over emerging markets, weak corporate earnings and a batch of mixed economic data. Back in the UK, over the weekend EY Item Club warned the Bank of England that it needs to be "prepared to take action" to tackle London's "bubble-like" conditions reflected in its latest research. It said the price of the average house in the capital was set to soar to £600,000 by 2018. Meanwhile, MPs have called on the Financial Conduct Authority to tighten the regulations currently imposed on the bankers' bonuses for front-line staff, by imposing a cap on incentive schemes. Turning to today, the session will see the release of UK manufacturing PMI, with the same also due to be released from Spain, Italy and the US. Also in the States, data will be published on Construction Spending and ISM Manufacturing Prices.In this morning's company news, Rexam has proposed the sale of the Pharmaceutical Devices and Prescription Retail Packaging divisions of its Healthcare business for $805m. The consumer packaging company said Montagu Private Equity has made a binding offer for the divisions. The transaction is subject to regulatory approval and is expected to be completed around mid-2104.BBA Aviation has sold its APPH entities, a full-service landing gear and hydraulic sub-systems supplier, and announced it was considering a cash return to shareholders. The business, which had formed part of BBA's Aftermarket Services division, was sold for $128m, the $120.6m proceeds of which would be use to reduce the group's debt level. Randgold Resources said it hit targets for 2013, boosted gold production to a new record level and expects output to rise over the next five years. Production for the quarter and year to December rose 20% and 15% respectively, in line with guidance.Medical technology company Smith & Nephew has agreed to buy medical device company ArthroCare Corp. The group will pay $1.7bn, or $48.25 per ArthroCare share in cash, representing an enterprise value of $1.5bn.NR