London pre-open: Geopolitics, Asian data to weigh on stocks ahead of BoE

13th Aug 2014 07:53

UK stocks are expected to open with small losses on Wednesday with investor risk appetite subdued ahead of the Bank of England's Inflation Report.Ongoing geopolitical concerns and a wave of economic data from Asia were also likely to be dampening sentiment in morning trade. City sources predict the FTSE 100 will open just seven points lower than Tuesday's close of 6,632.42.In China, industrial production, retail sales, money supply growth, fixed asset investment and new loans figures all came in worse than expected overnight.Meanwhile, it was reported that Japanese gross domestic product (GDP) declined at an annualised rate of 6.8% in the second quarter of 2014, a sharp turnaround from the revised 6.1% growth at the start of the year as a result of a hike in sales taxes. While this was not as bad as the 7% fall in GDP expected, it was Japan's worst contraction since 2011.Stocks to watchMining and trading giant Glencore gave a mixed production report for the first half of 2014 with output of some commodities improving while others declined. However, production of copper and coal - the company's biggest contributors to profit - both increased over the year. Ferrochrome and oil output also rose, but declines were seen in zinc and nickel. Car insurance specialist Admiral reported a 2% rise in profits before tax, and excluding minority interests, to reach £184.9bn in the first half as growth in the UK outweighed weakness abroad. Statutory profits before tax increased 1% to £183.3m. Turnover at the group level fell 5% to hit £1.04bn. The group's combined ratio improved to 85.1% from 87.4% in the comparable period of a year ago. "In the UK there are some signs that premiums are no longer falling but we have yet to see firm evidence of an inflection point and a return to premium growth," management said. South West Water owner Pennon Group said that an already-announced tariff freeze would hit 2014/15 profits but it said strong financial performance was continuing and it expects to hit its regulatory targets for 2010-15.A long list of blue chip stocks are likely to be lower this morning after going ex-dividend, including AstraZeneca, BG Group, GKN, IMI, Meggitt, Pearson, Rio Tinto, RM, Schroders, Standard Chartered, Royal Dutch Shell Fresnillo, Ashtead, BT Group and Diageo.