London pre-open: FTSE to rise on US deal with Iran

25th Nov 2013 07:28

City sources predict the FTSE 100 will open around 28 points higher than Friday's close of 6,674.30 after the US struck a deal with Iran on its nuclear activities in exchange for the easing of international sanctions against it, which had been affecting its oil exports. The deal means tensions in the Middle East have been eased considerably. The main US stock indices ground higher on Friday, following positive unemployment data on Thursday and as traders squared their books ahead of this week's Thanksgiving Day holiday. In fact, both the Dow Jones Industrials and the S&P 500 finished higher for a seventh consecutive week and at record highs. Back in the UK, Business Secretary Vince Cable has referred a report that banking giant RBS had defaulted businesses which were "good and viable" in order to make higher profits to City watchdogs. Meanwhile, small sports groups are to be given tax breaks in an effort to improve participation levels, a change which could benefit over 40,000 clubs. Royal Mail is facing the prospect of further strikes this week, with union heads due to meet today to discuss whether they will take action of pay and employment terms. They have until Wednesday to make a decision, the same day the group will report its half-year results, which are expected to show a 5.6% increase in profits. On today's agenda macro wise are BBA mortgage lending figures, which last month revealed the number of mortgages approved in September had surged almost 40% above the previous year's figure for the same month. The BBA's announcement comes ahead of data on new mortgage approvals due out on Friday, which is expected to show a rise of 70,000 - the first gain since January 2008. As for this morning's company announcements, Rolls-Royce has been awarded a contract to produce its Liftsystems, which enable short take off and vertical landing, for the F-35 Lightning II programme. The $215m deal will see it produce and support six Liftsystems, as well as provide programme management, engineering and field support. London-listed engineering services giant Babcock has revealed that it is in discussions about setting up a 'joint venture' with helicopter firm Avincis. The Financial Times cited sources as saying that the Babcock is looking to pay around £400m for a 50% interest in the company before a potential takeover at a later date. Another source told the paper that Babcock could be interested in a "significant minority stake".On the second-tier index, pork producer Cranswick reported a 16% rise in pre-tax profits to £26.1m in the first half on the back of strong demand for the meat. Revenue jumped 15% to £483.5m in the six months through September, following the commissioning of a new pastry facility and the strategic development of the company's pig breeding and rearing activities.Defence group Chemring said expectations for the financial year ended October 31st remain in line with previous guidance despite the adverse market backdrop. Revenue in the final quarter was approximately £185m, down 24% from the same period last year while its order book at the end of October was £702m, 8% lower than at the end of the previous financial year.NR