London pre-open: FTSE to open lower ahead of Eurogroup meeting

20th Nov 2012 07:30

City sources predict the FTSE 100 will open down 11 points from yesterday's close of 5,738, as markets rebalance following Monday's strong rebound after last week's poor performance. Investors were yesterday cheered by hopes that the US can tackle the 'fiscal cliff' and sustain economic growth early next year. Thus, speaking to reporters in Bangkok on Sunday, President Barack Obama said: "I am confident we can get our fiscal situation dealt with." In fact, congressional leaders called on him to 'fast track' discussions. This follows discussions between key members of Congress on Friday which were labelled by all sides as "constructive". Traders are also hoping that a deal can be reached at today's extraordinary Eurogroup meeting so that Greece will receive the next tranche of its bailout programme. However, Marianne Kothe, spokesperson for Germany's Finance Ministry, has told the German press that a decision on Greece's aid is not expected to be made by Tuesday. Never the less, and in the opinion of economists at Lloyds, "While the tranche may not be officially signed off today, we continue to expect positive noises from the meeting which will be EUR/USD supportive." On today's agenda are the US ABC Consumer Confidence reading, US Building Permits, US Housing Starts and the German Producer Price Index.In company news, real estate investment trust British Land saw a solid increase in underlying profits in the first half, as it continued to outperform its benchmark of property returns, the IPD (otherwise known as Investment Property Databank). Underlying profit before tax in the six months to September 30th was £137m, up 3.8% year-on-year. Meanwhile, net rental income rose 1.1% to £272m. Home emergency repairs group HomeServe saw a decent increase in revenue and profit in the first half despite a slight fall in customer numbers over the period, as it continues to refocus its UK business. Revenue during the six months to September 30th totalled £229.6m, up 8% on the £213.1m reported last year. Meanwhile, adjusted profit before tax rose 9% from £23.5m to £25.6m.LED manufacturer Dialight has received a major order from an unnamed US power plant operator for over 1,000 LED lighting fixtures. The order, which consists of 1,050 LED Linear fixtures and 30 High Bay fixtures for use across the power plant, has a contract value of around $400,000. For anyone looking for a tip, The Independent is inclined to buy Majestic and says it is impossible to ignore yesterday's results. For the six months ending October 1st pre-tax profits increased to £9.2m, up 4%. Total sales eased back 1.4% to £126m, but that's explained by the company pulling out of the wholesale trade to concentrate on fuelling retail growth which offers much better margins. The shares are not cheap, at 16 times full-year forecast earnings, albeit with a solid 3.7% prospective yield. A business that can do so well in a difficult economy ought to really motor if there is even a mild improvement.