London pre-open: FTSE to slump in early trade

21st Feb 2013 07:31

City sources predict the FTSE 100 will open down 39 points from yesterday's close of 6,395, tracking both Asian and US stocks, with the latter sharply lower after minutes were released from the most recent meeting of policy-makers at the Federal Reserve. Polarized opinions as to the effectiveness of the bank's existing strategy of buying bonds until the nation's unemployment rate had contracted appeared to be in force. The rate of unemployment in the US is close to 8.0% at present.Meanwhile, the Dow experienced its second worst fall in 2013 while slumping stocks pushed the S&P 500 Index down 1.2%, marking the biggest daily fall that the index had seen since the middle of November.Today's UK economic announcements include the CBI industrial trends survey and public sector finances, while internationally the agenda includes US CPI, US crude oil inventories, and US existing home sales. Yet the most important economic indicators today will be the Eurozone purchasing manager surveys, due early in the session. Spain's Treasury will auction up to €4bn in short and medium-term debt towards 10:00. At least two Fed speakers are scheduled for this evening, albeit after the close of UK markets. The President of the US Federal Reserve of New York will speak at 17:30 and that of the San Francisco Fed at 18:00.In company news, events group Informa has been awarded a 30-year licence to run agriculture fair Agrishow in Brazil including this year's show in April. Agrishow is the largest agricultural exhibition in Latin America, attracting close to 800 exhibitors and over 150,000 visitors.Supplier of speciality plastic, fibre and foam products Filtrona has announced the formation of a joint venture with BBM Bommidala Group in the United Arab Emirates to manufacture filters. BBM is an Indian tobacco products and by-products, and a leading cigarette exporter from India. The joint venture, in which Filtrona will be the majority shareholder, is expected to be fully operational during the third quarter of 2013.Mining company Tullow Oil has undertaken exploration at a well in Uganda and admitted that no hydrocarbons were found to be present. The FTSE 100-listed company reported that exploration drilling had continued in the Total-operated EA-1A block to the north of Lake Albert, with the Ondyek-1 exploration well, located 16km northwest of the Nigiri-1 oil discovery.