London pre-open: Small gains expected early on

18th May 2015 07:43

UK stocks are expected to edge higher on Monday morning, though developments in Greece are likely to cap any upside as uncertainty lingers on.City sources predict the FTSE 100 will open nine points higher than Friday's close of 6,960.49.Economic data is on the thin side on Monday with the NAHB US housing market index at 15:00 the only major release."European futures are pointing to the upside ahead of the first trading day of the week suggesting a more positive sentiment among traders despite Greece's apparent insistence on walking blindly towards default without any consideration for the consequences," said Oanda analyst Craig Erlam.It emerged over the weekend that Greek prime minister Alexis Tsipras had written to the IMF saying it did not have enough funds to repay it.While the repayment was actually made last week using emerging cash reserves, Tsipras stressed that Athens would not "back down on pension and labour issues" as creditors continue to negotiate over a cash-for-reforms deal.Erlam said: "If neither side changes its stance then it would appear Greece is only a couple of weeks from defaulting on its debt and yet, the markets seem rather unfazed. Maybe investors have become immune to all this tough talk and still think Tsipras will cave or resign, enabling a late deal to be done. If we remain in this position as we near the 5 June, I doubt investors will be so confident."Stocks to watchBabcock posted a 47% rise in pre-tax profit for the year ended March 31st 2015 on Monday, to £313.1m from £218.8m, with revenue up 37% on the year at £4.5bn. The company said that revenue growth has come both organically, through major contract wins and by expanding and enhancing existing contracts, as well as from acquisitions made in the past year.Precious metals producer Fresnillo said it remains on track to hit its output guidance in 2015 after a strong start to the year following a "challenging" 2014. At its annual general meeting on Monday, the Mexico-based miner is expected to reiterate its target of producing 45m-47m ounces of silver and 670,000-685,000 ounces of gold this year.