London pre-open: Stocks to open higher after positive stress-test result for British banks

27th Oct 2014 07:43

A positive start is on the cards for UK stocks after it was revealed that every British bank passed the Eurozone 'stress tests', although one in five European banks failed.City sources predict the FTSE 100 will open around 44 points higher than Friday's close of 6,388.73."While 25 of the 130 banks that were tested failed, 12 have already raised the capital needed fill the gap leaving only 13 to make up the shortfall," Alpari market analyst Craig Erlam explained."This is fewer than the markets had been anticipating which is a relief given that the last thing the euro area needs right now is for people to lose faith in them again."Attention will now likely turn to the next round of targeted longer-term refinancing operations (TLTROs), with many people anticipating that a better round of stress tests would result in a higher take up of the cheap loans than after the previous round.However, in Erlam's view, "banks may be more willing, and in a better position, to take the loans and lend, but that doesn't mean the demand will be there".He explained: "For this to work, there needs to be supply and demand and I'm not convinced enough has been done by governments to ensure that demand for loans will be there."Eyes will also be looking ahead to Wednesday's Federal Open Market Committee meeting to see whether it will change its quantitative easing programme.Closer to home, Monday's session will also see the release of sentiment data for Germany, which comes after figures published on Friday showed that consumer confidence was higher than expected and better than the previous month.In company news, Anglo American has reported the delivery of the first ore on ship (FOOS) from its Minas-Rio iron ore project in Brazil. The mining group announced on Monday that the first cargo of over 80,000 tonnes of ore had been loaded onto a ship at the port of Açu in Rio de Janeiro state. The vessel is currently on its way to customers in the pellet feed market in China. Chief executive Mark Cutifani said that delivering FOOS from Minas-Rio was a "remarkable achievement [...] and is one of our three major commitments to our shareholders this year".Renishaw revealed that it now expects the trend in revenue growth experienced in the first quarter to continue in the second half of its financial year. The brief announcement came less than two weeks after it delivered its interim management statement.