London pre-open: Losses expected on concerns over global growth

8th Oct 2012 07:37

City sources predict the FTSE 100 will open down 31 points from Friday's close of 5,871, putting an end to the rally which followed better-than-expected jobs data from the US. However, the positive effect of the good news didn't last long and trading in Asia overnight has been poor. This downturn was largely the result of the World Bank's decision to cut its growth forecasts for East Asia and Pacific region on Monday, saying it believes there is a risk the slowdown in China could worsen and continue for a longer period than had been expected. China's retail sales growth slowed in a key period of trading, the Golden Week break at the start of October, but said demand was better-than-exepected. Sales grew 15% compared to 17.5% the same period the previous year, despite this year's holiday having an extra day added on as part of the Mid-Autumn Festival. Even so, the country´s service sector purchasing managers index for the month of September has risen to 54.3 points from 52 before. Back in Europe, all eyes are on Greece. European Union Comissioner Olli Rehn expects the country to receive the backing of the Troika as regards the assesment of its progress on carrying out the necessary economic adjustments. ECB Governing council member Jorg Asmussen, on the other hand, has been cited as being opposed to Greece being given more time to meet its commitments. The ONS is due to publish a consultation document on potential changes to the RPI calculation formula. No specific publication time has been announced, but the release is expected sometime this morning, Barclays Research is pointing out. In company news, WPP, the FTSE 100 advertising and media giant led by Sir Martin Sorrell, has bought a majority stake in German digital media agency k102, as it continues to expand its digital capabilities. k102, based in Dusseldorf, was founded in 2006 and generated revenues of €1.3m in 2011 with gross assets at the end of December of €1.2m. It has worked alongside WPP's global marketing communications division Grey since January 2010 and has a client list including Deichmann, Transparo, MBT, Gard and Toshiba.House builder Persimmon said it had bought South East England builder Hillreed Homes for 35.7 million pounds. Hillreed, which is based in Kent and established in 1975, focuses on family housing and had a landbank extending to approximately 3,400 plots, including strong strategic land holdings, Persimmon said.Property group London & Stamford (LSP) and its joint venture partner Green Park Investments have disposed of their half-share in the Meadowhall Shopping Centre on the outskirts of Sheffield. Norges Bank Investment Management, Norway's sovereign wealth fund, is paying £1.525bn for a 50% stake in the shopping centre, which also counts British Land as a stakeholder. London & Stamford's stake in Meadowhall was 15.7%.Analysts at Deutsche Bank have upgraded EasyJet to buy from hold.