London pre-open: Gains expected ahead of ECB meeting

4th Dec 2014 07:43

The FTSE is expected to open higher on Thursday morning amid expectations the European Central Bank (ECB) will take a step closer to full quantitative easing (QE) at its December meeting.City sources predict the FTSE 100 will open around 16 points higher than yesterday's close of 6,716.63.President Mario Draghi has said the ECB would consider buying government bonds if inflation remained dangerously low for too long."Hopes of a mass bond buying programme by the European Central Bank are likely to be dashed despite earlier remarks made by ECB President Mario Draghi, as Eurozone inflation - currently 0.3% - is less than a fifth of the bank's target of below but close to 2%," said BBA's chief economist Richard Woolhouse.However, most analysts see the ECB holding back on such a move this week."In the week before last, the president and vice-president (VP) of the ECB gave some of the biggest hints yet that the ECB is looking to engage in more stimulus, specifically referencing government bond purchases as a policy tool," explained CMC Markets UK's Jasper Lawler."VP Constancio, along with other ECB governors, have stated the need to wait for the results of current measures including the purchase of asset-backed securities and covered bonds and the TLTRO programme before starting a new programme. For this reason, the announcement of sovereign QE at this meeting seems unlikely, but some more explicit hints at the programme starting in the first quarter may be all the markets need to push further ahead."Meanwhile, the Bank of England (BoE) also releases its latest policy decision but the market does not see any surprises in store.The BoE is expected to maintain interest rates at 0.5% and asset purchases at £375bn.In company news, travel tour operator TUI Travel met expectations with a small rise in annual profits and painted a positive outlook for the winter and upcoming summer season ahead of its planned merger with parent group TUI AG. Operating profits increased by 4% on an underlying basis to £612m, bang in line with the consensus forecast.Carillion has been awarded support services contracts by Heathrow Airport and Barts Health NHS Trust, which together are worth approximately £80m. The agreement with Heathrow runs until March 2019, while the contract with Barts is for 22 months.Recruitment company Hays has acquired an 80% stake of US IT staffing firm Veredus for £28m on a cash free basis.The purchase will be fully funded from existing debt facilities and Hays has the option, which will be available for exercise in March 2018, to acquire the remaining 20% from the selling shareholders, the company said.More passengers travelled on Easyjet last month than a year ago, the budget airline said. The Luton-based carrier increased passenger numbers by 3.1% to 4,386,296 in November against the same month in 2013. The load factor - a measure of how full its aircraft were - increased by 0.5 percentage points to 89.5%.