London pre-open: Nervous start anticipated

8th Aug 2011 07:51

After a week-end of mostly bad news it is little surprise that the London stock market is set to open in the red, with City traders predicting the blue-chip index could open as much as 80 points lower.Reports suggest the European Central Bank is set to wade into the financial markets today in an attempt to prevent the turmoil in the single-currency area from spiralling out of control. Meanwhile, in the UK, the market is braced for a bleak quarterly inflation report from the Bank of England later this week, which is expected to confirm the picture of disappointing growth at home and abroad.The final sour cherry on the cake is the announcement last week by ratings agency Standard & Poor's (S&P) of a downgrade of its rating for US sovereign debt to AA+. S&P decided to maintain its 'negative' outlook on the long-term debt, although both the short and long-term ratings have been removed from "credit watch".On the corporate front, miners are to the fore in London. Mining leviathan Vedanta's subsidiary, Sesa Goa, is set to acquire a 51% stake in Liberian miner Western Cluster for $90m. Vedanta's sector peer Rio Tinto and Japanese trading house Mitsubishi Corporation plan to mop up the rest of the shares in Australian Stock Exchange-listed miner Coal & Allied that they don't already own.Data centre operator Telecity saw half-year earnings before interest, tax, depreciation and amortisation (EBITDA) rise 30.5% to £49.45m from £37.89m last year, while the EBITDA margin improved to 44.4% from 40.4%.--jh