London pre-open: Sharp falls expected after volatile session in Asia

13th Jun 2013 07:29

The FTSE 100 is expected to extend its current losing streak into its fourth day following heavy falls on Wall Street and another volatile session for Asian markets overnight.Continuing uncertainty regarding the Federal Reserve's 'exit strategy' from stimulus and a strengthening yen saw Japan's Nikkei index plummet over 6.0% on Thursday, while China's Shanghai Composite and Hong Kong's Hang Seng lost around 3.0% of their value. Dampening sentiment further was the World Bank which yesterday cut its forecast for global economic growth to 2.2% in 2013, down from its initial 2.4% estimate in January. Meanwhile, the bank said it now expects China to grow by just 7.7% this year, down from its previous 8.4% prediction.After hitting 6,299 on Tuesday, a closing level not seen since April 22nd, the FTSE 100 is expected to open sharply lower this morning, with City sources predicting a fall over around 85 points."Despite the fact that it remains unlikely that either the Fed or the Bank of Japan are likely to start reining back on their stimulus measures any time soon, investors appear to have decided that the mere prospect of an exit strategy is enough of a reason to look at pulling money off the table on a fairly comprehensive scale," said Senior Market Analyst Michael Hewson from CMC Markets. Stocks to watch: RBS in focus as Hester steps downRBS will be closely watched today after announcing last night after the close that Stephen Hester will step down as Chief Executive Officer after five years. The boss, praised widely for his work at turning the bank around following its government bailout in 2008, said he was stepping aside as the lender prepares for a re-privatisation. According to Sky News City Editor Mark Kleinman, RBS is to announce plans to cut up to 2,000 investment-banking jobs as part of its ongoing restructuring. Homebase and Argos owner Home Retail has revealed an improvement in like-for-like (LFL) sales at both chains in the first quarter, though margins at both retailers were down sharply on the year before. Chief Executive Terry Duddy said that overall the group's trading has been consistent with the board's expectations.Luxury fashion group Mulberry revealed full-year results in line with expectations, as stronger retail sales were weighed down by weakness among wholesale, as the group looks ahead to future growth in the US and Asia. Rio Tinto has agreed to sell its US-based Eagle nickel-copper mine for $325m as part of a series of asset sales.