London pre-open: Italian uncertainty to weigh on stocks at the start

10th Dec 2012 07:43

After having gained nearly six per cent over the past four weeks, the Footsie is expected to open slightly lower on Monday's session on the news that Japan's economy sank into a technical recession in the third quarter.City sources predict the FTSE 100 will open down 10 points from Friday's close of 5,914. This is some 5.51%, or 309 points, higher than the level it was at on Monday November 19th.  Japanese gross domestic product (GDP) fell at a annual rate of 3.5% in the three months to the end of September, in line with the preliminary reading. This follows the revised 0.1% decrease in the second quarter. While the market was expecting a contraction in the third quarter, the 3.5% rate of decline was worse than the 3.3% fall pencilled.Elsewhere, industrial production figures in China were strong last month, rising at an annual rate of 10.1%, up from October's 9.6% gain and the 9.8% increase expected. However, the country's exports rose by less than forecast in November, by 2.9% month-on-month (Consensus: 9%). In the Eurozone, a close eye will be kept on Italian bond yields today after the weekend's news that Prime Minister Mario Monti is to step down at the end of the year once the 2013 budget has been passed. This follows last week's move by Silvio Berlusconi to withdraw his party's (PDL) support for Monti's technocratic government."The uncertainty that the prospect of an early election could introduce into Italian bond markets cannot be underestimated even allowing for the placebo of the ECB's OMT program pledge, with any deterioration in Italian borrowing costs exerting further strains on political stability ahead of this week's EU Summit," said market analyst Michael Hewson from CMC Markets.Meanwhile, Greece is said to be near reaching its target in its debt repurchase, according to an official of the Greek government. COMPANY NEWSMining titan Eurasian Natural Resources Corporation (ENRC), is to buy the remaining stake in Democratic Republic of the Congo (DRC) focused group Camrose Resources for over half a billion dollars, the firm announced on Monday. ENRC Congo BV, which already owns 50.5% of Camrose, has proposed to buy the remaining 49.5% interest for $550m in cash. The acquisition is an attempt to simplify its organisational structure and consolidate its position within the DRC.Irn-Bru maker AG Barr posted a robust increase in revenue in the 18 weeks to the start of December and says it remains confident of delivering on full year expectations. Revenue for the 18 weeks to December 1st 2012 increased 9%, with volumes up by 6.6% from the same time a year before. Year to date revenue has increased by 6.5% compared to last year's figure of 4.6%.Ken McMeikan, the Chief Executive Officer of bakery and hot snacks retailer Greggs is to leave the company for catering firm Brakes Group. Derek Netherton, Chairman of Greggs, said: "We are very grateful to Ken for the valuable contribution he has made to Greggs. He has led the company through the major changes that have put us in a strong position for the future with a clear strategy for growth in a difficult environment. We wish Ken well in his new role."