London pre-open: FTSE to track US markets lower

8th Oct 2013 07:37

City sources predict the FTSE 100 will open around 15 points lower than Monday night's close of 6,437.28, tracking Wall Street benchmarks which finished with steep losses, as the political brinkmanship over the debt ceiling continued into its second week.The S&P 500 dropped 14.38 points (-0.9%) to 1,676.12, its worst level in four weeks."The government shutdown has now entered its second week and still, a deal on the budget and the debt ceiling are no closer to being done. The longer this goes on, the more we're going to see this uncertainty in the markets turn into negativity," said Market Analyst Craig Erlam from Alpari. On today's agenda, UK retail sales data from the British Retail Consortium (BRC) will be released along with a report from the Royal Institution of Chartered Surveyors on the house price balance. German economic data will be released amid uncertainty over which party Chancellor Angela Merkel's Christian Democrats will form a coalition with in order to end a hung parliament. The German trade balance will be released for August and is expected to come in at €15.6bn, down from €16.1 in July when exports stagnated and imports rose. Another report is forecast to show German factory orders climbed 3.9% year-on-year in August, compared to 2% a month earlier. In UK company news, Ferrexpo, the FTSE 250 Swiss head-quartered iron ore company, has produced a record amount of 65% iron pellets from its own ore this year so far, the group said Tuesday. Total pellet production was up 12.5 per cent in the year-to-date, with production for September coming to 970.4kt.FTSE 250 insurer Direct Line has agreed to sell its life insurance arm to closed book specialist Chesnara and return the profit to shareholders. The pair have agreed a £62m fee for Direct Line Life Insurance, which parent Direct Line said it expected to result in a £12m gain.FTSE 250 materials group Victrex said sales volumes picked up in the second half of the year, after good progress across its industrial and transport markets, adding that its order book for October is reassuring. Full year sales volume were slightly ahead of last year at 2,920 tonnes from 2,904 tonnes in 2012, following a robust second half performance, with sales volume approximately 10% ahead of the first half year.NR