London pre-open: Stocks expected to move higher early on

28th Mar 2014 07:35

A positive start is expected for UK stocks this morning, led by gains seen in Asia overnight and recovering after yesterday's session which saw both miners and banks drag the main index lower. City sources predict the FTSE 100 will open around 18 points higher than yesterday's close of 6,588.32.Over in China, there has been chatter about a potential increase to spending on infrastructure in a bid to support economic growth, which followed quotes from Premier Li Keqiang printed in the state media. Over in the US, there was no respite from selling pressure on Thursday as stocks on Wall Street finished with moderate losses, with investors digesting mixed economic data and the results of the banking stress tests.Figures out during the session showed that jobless claims fell more than expected last week, economic growth estimates were revised higher, albeit not as much as expected, and pending home sales slumped.US jobless claims dropped to their lowest levels in nearly four months last week, according to the Labor Department. Initial claims for unemployment benefits fell by 10,000 to a seasonally-adjusted 311,000 in the seven days to March 22nd, from a revised 321,000 the week before. This was the lowest since November and surprised analysts who had expected claims to rise to 323,000.US gross domestic product (GDP) growth in the fourth quarter was revised higher to an annualised rate of 2.6%, from the initial 2.4% estimate. However, the consensus estimate was for a revision to 2.7%.Pending home sales fell at a year-on-year rate of 10.2% in February, worse than a revised 9.3% decline in January and the 9% drop expected by analysts.Turning to today's session, the agenda includes revised UK economic growth data, along with reports on Eurozone economic confidence, German inflation and US consumer confidence. A release on GDP in the UK is expected to show 2.7% year-on-year growth in the fourth quarter, confirming an initial estimate.Another report may reveal Eurozone economic confidence increased to a reading of 101.3 in March, from 101.2 a month earlier.German inflation is projected to come in at 0.9% compared to 1% a year earlier.Later on the US, the University of Michigan unveils its consumer confidence index, which is tipped to come in at 80.5 in March, from 79.9 a month ago.Also in the US, investors will be watching for data on personal spending and income.In this morning's UK-listed company news, insurance group Aviva said it had agreed to sell US equity management business to Affiliated Managers Group. River Road was bought by Aviva's subsidiary Aviva Investors in 2009. Group Chief Strategy and Development Officer of Aviva Jason Windsor said the disposal is in line with the company's strategy of simplifying its business.Hansteen Holdings, the FTSE 250-listed investor in UK and continental European industrial property, has acquired a further £26m of units in the Ashtenne Industrial Fund (AIF) and as part of this has raised £47.1m through the issue of 44.83m shares, equal to 7% of its issued share capital. The withdrawal of US troops from Afghanistan is delaying orders defence gadget maker Qinetiq, although the company said its European arm was doing well and its US business was trading in line with hopes.ITE Group, the emerging markets-focused trade exhibitions and conferences organiser, said that revenue growth has been held back by adverse currency movements but still said it is set to deliver record profits in the first half. Revenue for the six months ending March 31st is expected to be around £72, up 4% from £69m the year before, reflecting a stronger biennial pattern and good trading. Like-for-like (LFL) sales are up 10% on a constant currency basis. However, after including foreign exchange movements, LFL revenue was actually down 2%.NR