London pre-open: Situation in Cyprus to send FTSE plummeting

18th Mar 2013 07:27

City sources predict the FTSE 100 will open down 121 points from Friday's close of 6,490, tracking Asian markets and the euro lower, as fears over Cyprus escalate.With the country taxing savers' deposits, it has raised fears that this could pave the way for future bailouts in the Eurozone. The news sent Asian stocks firmly lower overnight and markets across Europe are expected to be hit by the news when they open this morning. This was already set to be critical week for Britain, with a slew of macroeconomic reports scheduled for release. Far more important, however, will be the Chancellor´s Budget speech, midweek, and the minutes of the Bank of England´s latest Monetary Policy Committee that same day. Somewhat ironically, Investec points out how the most interesting part of the Chancellor´s Budget speech - on Wednesday - will be what he has to say about monetary policy. More specifically, markets will be listening for any (expected) references he might make regarding the need for a possible modification of the Bank´s policy remit. The government seems to think that it is necessary for the central bank to be able to play a more prominent role if the economy is to get out of its current rut. In today's UK company news, Berkeley Group, the FTSE 250 house builder, has said it is confident that it will meet expectations for the year ending April 30th and is on track to return 1,300p per share to shareholders by September 30th 2015. As part of this, the group also said it has declared an interim dividend of 15p, marking the first return to shareholders since Berkeley repositioned the business in March 2009. FTSE 100-listed natural gas production company BG Group has completed an appraisal programme in the Jodari field of Block One in offshore Tanzania. The drill stem test on the Jodari-1 well - the first in deep water off Tanzania - flowed at a maximum rate of 70m standard cubic feet of natural gas per day, constrained by testing equipment, the group reported. Financial services giant Legal & General (L&G) has bought a large interest in a major British home builder from Lloyds Banking Group, marking the group's first direct investment of this kind. L&G, which provides protection, annuities, savings and investment management products in the UK, said in a statement that it has bought a 46.5% equity stake in CALA Group for £65m.