London pre-open: Growth concerns weigh on FTSE

10th Oct 2012 07:29

City sources predict the FTSE 100 will open down 19 points from yesterday's close of 5,810, extending Tuesday's losses as concern over growth weighs down investor sentiment around the globe, with significant falls seen in both Asia and the US overnight. This followed yesterday's big news that the International Monetary Fund (IMF) had cut global economic growth forecasts for this year and next because "prospects have deteriorated further and risks increased". According to its "World Economic Outlook", the IMF now expects the world economy to grow 3.3% in 2012 compared to the prior 3.5% July estimate and just 3.6% in 2013, down from the previous 3.9% forecast. Forecasts for the Eurozone, UK and emerging markets were all cut. Although Angela Merkel's time in Greece proved to be more successful than anticipate, the visit has not done enough to alleviate concerns over the ongoing problems both there and in Spain. Investors must now wait until November to hear whether Greece has made sufficient progress with its austerity programme to be granted further assistance from the EU. In company news, SABMiller has gone back to its African roots, marketing its African beer brand, Chibuku, in ten countries across the continent. Chibuku is an opaque beer based on traditional African recipes using maize and/or sorghum, depending on local tastes. SABMiller has invested $16m over the last 18 months in the brand, and is expecting to shift more than half a million hectolitres of Chibuku across new markets in Africa by the end of this financial year (March 31st 2013).Struggling chocolate retailer Thorntons said weak consumer spending meant it was cautious in its outlook ahead of the key Christmas season. However, the firm said trading for the fourteen weeks up to and including October 6th was in line with expectations. Total sales fell by 1% to £46m, mainly due to the effect of the planned 36 own store closures in the previous financial year, while commercial sales were up 9.8% to £21.2m. FTSE 250 iron ore miner Ferrexpo saw a slight increase in pellet production from own ore in the third quarter, but eased back on the purchases of third-party concentrate. Compared with the second quarter, pellet output from own ore rose by 2.8% from 2,305.4k tonnes to 2,371.0k tonnes. Year-to-date (YTD) production, at 6,933.9k tonnes, was 3.1% higher than the same period of 2011.The Times´ Tempus column says recruiter Hays' first quarter performance to the end of September was better than the market had feared and better than that of its rival, Michael Page International. Most analysts are shooting for pre-tax profits in excess of £122m for Hays this year and next, which would be an unchanged out-turn from last. The shares, up 4.25p at 79.5p, are on 14 times earnings and so well up with events.