London pre-open: Gains expected early on

5th Aug 2013 07:38

Markets are expected to open with small gains on Monday morning as stocks attempt to rebound after a US data-inspired sell-off on Friday afternoon.City sources predict the FTSE 100 will open up around five points from yesterday's close of 6,648. Non-farm payrolls figures from the States disappointed last week, increasing by just 162,000 in July, lower than the downwardly revised 188,000 increase in June and much worse than the consensus forecast of 185,000. The unemployment rate dropped more than predicted from 7.6% to 7.4%, though this was partly due to a combination of employment growth and a small decline in the labour force.Markets across Europe responded with sharp falls on Friday, though Wall Street benchmarks ended the day in positive territory, with both the Dow jones and S&P 500 once again setting fresh all-time highs."Friday's disappointment about a weaker-than-expected US jobs report soon gave way to yet more record highs for US markets as investors reasoned that the softer number would make it much less likely that the Fed would be in the mood to begin a tapering programme at its next meeting in September," said Michael Hewson, a Senior Market Analyst at CMC Markets. Providing support to markets this morning was the weekend's news that activity in the Chinese services sector picked up last month. The official non-manufacturing purchasing managers' index (PMI ) for July rose from 53.9 to 54.1.Data elsewhere will be also in focus on Monday with services PMIs due out in the Eurozone, UK and US today.Stocks to watchMining and marketing giant Glencore Xstrata is to sell its grain-handling unit Joe White Maltings to US firm Cargill. Cargill, which produces and markets food, agricultural, financial and industrial products, is to get its hands on the largest manufacturer of grain in Australia, which produces over 550,000 tones every year. The division was originally purchased through Glencore's $5.9bn acquisition of Canadian agricultural firm Viterra last year.Alent said net sales value (NSV) in the first half was broadly flat as copper damascene volumes were impacted by destocking and increased competition. The supplier of advanced surface treatment plating chemicals and electronics assembly materials reported a 0.7% drop in NSV to £209.2m. Car accident services firm Nationwide Accident expects profit for the full year to be below current market expectations as challenging market conditions persist. "Trading conditions in the accident repair marketplace remain tough, especially around margins, with the ongoing stresses apparent across the industry, creating both challenges and opportunities," the group said in a company statement.