London pre-open: Markets expected to consolidate after strong gains

2nd Jul 2013 07:20

UK markets are expected to open flat to slightly lower on Tuesday morning despite a decent performance on US and Asian markets overnight, as investors pause for breath after the solid gains made the day before. City sources predict the FTSE 100 will open down around five points from yesterday's close of 6,308.The index jumped 1.5% on Monday as it continues to rebound strongly after hitting a five-month low of 6,029 last week on the back of concerns over a withdrawal of US stimulus and a Chinese slowdown. Nevertheless, in the five trading sessions since, the index has risen over 4.0%.Yesterday's gains came despite economic data showing a continuing weakening of activity in the Chinese manufacturing sector in June. Manufacturing figures from both the UK and US however showed better-than-expected improvements last month."The ability of markets to rally on both good and bad news provides increased credence to the notion that we are set to return to the kind of bullish market sentiment which saw the creation of highs seen back in late May," said Research Analyst Joshua Mahony."However, today appears to be one of consolidation after yesterday's gains, paring some of that upside before a further push higher," he said. Stocks to watchDiversified mining group Antofagasta is looking to invest in two hydroelectric power stations in Chile that will provide energy for its nearby copper project, Los Pelambres. The company said on Tuesday morning that it has entered into an agreement with AES Gener to buy 40% of Alto Maipo, a company which has been tasked with constructing and operating two run of river hydroelectric plants located in the upper section of the Maipo River, around 50km south east off Santiago.UK housebuilder Persimmon said revenues rose in the first half as it completed 7.0% more homes than the previous year at a higher average selling price. Total revenues for the for the first six months of the year came to £900m, up 12% on last year's £806.7m, after finishing 5,022 new homes. The group achieved an average selling price of £179,200, compared to £171,206 last year, driven by an increase in the proportion of larger family housing in the sales mix.Transport group National Express said trading in the first half of the year has been in line with company expectations with total revenue during the period rising 7.0% at constant currency. Organic growth was seen across its five divisions, the group said in a company statement. Underlying revenue trends improved during the second quarter, boosted by cost controls, it added.BC