London pre-open: Lower start expected after sell-off on Wall Street

16th Aug 2013 07:28

Sharp losses on Wall Street last night are expected to translate into a poor start on the FTSE 100 on Friday morning as concerns about the tapering of US stimulus continue to dent investor confidence. City sources predict the FTSE 100 will open down 10 points from yesterday's close of 6,483.34. The index has still gained 10% since the start of 2013, as the Federal Reserve's quantitative easing programme has injected liquidity into financial markets. However equities have been choppy over recent months after the US central bank signalled that it would soon begin to scale back asset purchases if the economic recovery gathers momentum.New York benchmarks suffered steep falls last night with the Dow Jones index registering a 225-point fall, its biggest one-day drop in two months, after data from the labour market - a deciding factor in the potential scaling back of stimulus - came in better than anticipated with jobless claims falling to their lowest levels since October 2007. In addition to a rise in US consumer prices also announced yesterday, speculation about an imminent tapering of asset purchases at the Fed's next meeting in September continues to ramp up. Stocks to watch BHP Billiton could face enforcement action as part of the US regulatory probe linked in part to the hospitality it provided during its sponsorship of the Beijing Olympics in 2008. The mining giant said the US Securities and Exchange Commission, which started investigating the matter in 2009, and the US Department of Justice had recently told the group of the issues they considered could form the "basis of enforcement action". It said discussions were continuing. Energy resources and environmental consultancy RPS is buying HMA Land Services, a Canadian consultancy which provides services for linear infrastructure projects. RPS is paying C$18.7m, including the repayment of C$6.4 million of debt, for the firm.FTSE 250 property group Daejan confirmed income was in line with expectations in the first quarter of the year. A brief quarterly statement reported no significant sales had been made in the period to end-June in UK or USA, but that the second quarter should see more interest. BC