London pre-open: Modest gain expected on FTSE

22nd Nov 2013 07:27

City sources predict the FTSE 100 will open around 20 points higher than yesterday's close of 6,681.33, following a flat finish yesterday, as US stock markets ended higher on Thursday night after weekly jobless claims came in better-than-expected, pushing the Dow Jones above the 16,000 mark for the first time ever. Jobless claims fell to their lowest level since September, down by 21,000 to a seasonally adjusted 323,000 for the week ended November 16th. Investors also cheered news that the US Senate's Banking Committee had chosen to back Yellen's candidacy to Fed Chairwoman.Turning to today, Germany stars as the main headliner on the financial news agenda with the release of reports on both its economic growth and business confidence.Gross domestic product (GDP) in Europe's biggest economy is expected to rise 0.6% in the third quarter in line with the previous period. The Ifo's business confidence index is tipped to rise to 107.7 in November from 107.4 the prior month when it fell unexpectedly.The data will come a day after Chancellor Angela Merkel defended Germany against international criticism that it was not doing enough to reduce its high trade surpluses.Speaking in Berlin on Thursday, Merkel also rejected the idea that it should deliberately weaken its competitiveness.She said it was "absurd" to suggest German companies should reduce their quality or that wages in the export sector should be higher to weaken their competitive strengths, according to Reuters."It cannot and should not be the case that anyone tries to weaken Germany's competitiveness artificially," Merkel said.The US last month scolded Germany for its economic imbalances. Germany's current account surplus, at €19.7bn in September, is the biggest in the world.Merkel also said she is prepared to accept demands from the Social Democrats party for a national minimum wage in order to forge a coalition that would give her a third term in office.Aside from German data on Friday, it will be quiet on both the macro and micro-economic font. However, several reports indicate that the first global trade deal in a decade may soon be forthcoming. That ought to give capital markets an unexpected fillip.Just two FTSE 350 companies made announcements this morning, the biggest of which was Tullow Oil, which reported a fifth oil discovery onshore northern Kenya. The Agete-1 exploration well, in which Tullow has a 50% interest, has an estimated 100 metres of net oil pay in good quality sandstone reservoirs. The group also reported that elsewhere in Kenya, exploration and appraisal activities continued to accelerate with the Amosing-1 well expected to commence drilling before the end of November. Meanwhile, Essar Energy revealed it is one step closer to its FTSE inclusion after major shareholder Essar Gold Fund Limited (EGFL) said it intends to ensure it meets all the free float requirements with a 25% private sale of its shares in the company. "EGFL believes that the shares of Essar Energy represent exceptional value and will therefore only sell such minimum number of its shares in the company to enable Essar Energy plc to meet the minimum free float requirement," EGFL said. NR