London pre-open: Markets expected to rise after Japanese elections

22nd Jul 2013 07:28

Markets are expected to open with small gains on Monday after a resounding victory for Shinzo Abe in the Japanese general elections.City sources predict the FTSE 100 will open up around eight points from yesterday's close of 6,631.Markets in Asia were trading broadly higher overnight after Abe's Liberal Democratic Party (LDP) won a majority in the general elections in Japan. This is the first time in six years that the ruling party has had control over both the upper and lower houses of parliament. "Given the nature of the victory, investors will now hold Mr Abe to his promises to deliver on the 'third arrow' of his promised reform programme to help revitalise the Japanese economy," said Senior Market Analyst Michael Hewson from CMC Markets."Any prospect that he might feel compelled to pull back on the promised labour market reforms could well see markets lose confidence in the wake of a fairly promising start, though it would appear that his weekend victory has been mostly priced in."Stocks to watch Lighting company Dialight reported a drop in underlying operating profit for the first half, reflecting the repositioning of its obstruction signals business. The group said profit fell to £5.5m from £8.2m in 2012, as sales of obstruction signals declined by 40%. "The major reason for the decline in US Obstruction sales has been a complete change of channel and product strategy precipitated by the termination of Dialight's relationship with its former principal distribution partner in this business," Dialight explained.Infrastructure group Balfour Beatty has won a contract with student accommodation firm Urbanest to design and build a 19-storey building in the centre of London. The contract, worth £80m, will see Balfour start work on Westminster Bridge Road this summer, building higher education living for 1,092 students. The building will also accommodate a new sixth-form college, a health suite with a swimming pool, and affordable office space.BC