London pre-open: FTSE to open marginally higher after US data, Fed speech

25th Sep 2014 07:42

UK stocks are expected to start Thursday's session with modest gains, thanks to a dovish speech from a Fed member and strong US housing data released the previous day.City sources predict the FTSE 100 will open around three points higher than Wednesday's close of 6,706.27.The anticipated rise comes after US stocks staged a comeback following three losing sessions as investors took heart from upbeat housing market news and hopes of eurozone stimulus.In something of a surprise, new home sales in America climbed 18% to a seasonally adjusted annual rate of 504,000 units, the highest since May 2008, Washington said."This week is beginning to looks like a tale of two halves, with yesterday witnessing substantial gains across both US and Asian indices which are now expected to carry on through to the European market today," Alpari market analyst Joshua Mahony said."With European markets virtually bereft of any notable data or economic release today, it is likely that they will follow the lead of the US and Asian markets higher."Chicago Fed president Charles Evans offered a particularly dovish tone in his speech on Wesnesday, which was focused on his belief the federal open market committee ought to postpone a rate raise until there is greater momentum in the economy's recovery."This speech reflects to differing opinions within the Fed committee, where concurrent comments from Cleveland Fed Loretta Mester focused more upon changing the current forward guidance towards something which was data driven and could account for both longer and shorter period of time before rates rise," Mahony continued.Back in the UK, and in company news, retailer Sports Direct International revealed it has entered into a put option on 23m Tesco shares, which it said reflected its belief in the company. The company explained that the investment "reflects Sports Direct's growing relationship with Tesco and belief in Tesco's long-term future," it explained.Insurance provider Direct Line has announced it has reached an agreement to sell its international division to Mapfre for €550m. Direct Line described the deal as the last step in its strategic review and said that it expects to recognise a pre-tax gain on disposal of approximately £160m.Retail property developer Hammerson is launching a share placing to help it buy a major shopping centre in the English Midlands and to start a new outlet shopping centre venture. The placing is for up to about 71.3m new ordinary shares of 25p each, representing about a 10th of the company's valuation.