London pre-open: Stocks to pull back on 'fiscal cliff' concerns

20th Dec 2012 07:28

Stocks are expected to pull back slightly on Thursday morning following two days of decent gains with concerns resurfacing over the US 'fiscal cliff' after the White House vetoed the Republicans' 'Plan B'. City sources predict the FTSE 100 will open down 13  points from yesterday's close of 5,962."In scenes reminiscent of the debt ceiling debacle of 2011 US markets slid back last night as the impasse in the fiscal cliff talks played out along partylines, while ratings agency Fitch hinted at the risk of a ratings cut if the current impasse continued," said market analyst Michael Hewson from CMC Markets.Fitch said yesterday that the Eurozone crisis and US fiscal cliff threaten the sovereign ratings on seven of the 10 largest world economies and said it would come to a decision on the matter in 2013. Hewson added: "The recent rally has all the hallmarks of looking a little stretched in a classic 'buy the rumour; sell the fact' kind of way as the deadline approaches for a solution to the fiscal cliff. This suggests any further upside could well be limited, especially if politicians look as if they could leave a resolution to the period between Christmas and New Year."Last night, the Bank of Japan added an extra 10tn yen to the size of its asset purchase programme, a move widely speculated following the weekend's vote to elect pro-stimulus Shinzo Abe as the country's incoming Prime Minister. Stocks to watchOutsourcing giant Serco said it was on track to meet expectations for 2012 as it announced the sale of two operations at a loss. The firm said it expected to deliver a year of strong total revenue growth, including good organic growth.Engineering solutions group Weir is to buy pressure control rental equipment firm Mathena as it attempts to up its exposure to the fast-growing shale oil and gas market.Mathena, which makes a range of pressure control products including hydraulic chokes, mud-gas and shale-gas separators for the for onshore oil and gas markets, will be acquired for an initial payment of $240m (£148m) with a maximum deferred consideration of $145m payable over two years, subject to profit targets.TV decoder maker Pace, which was suspended from trading last week pending the potential 'reverse takeover' of Google's Motorola Home business, has said that it was unable to reach an agreement with the US search engine giant."Accordingly, Pace has contacted the Financial Services Authority to request that the suspension of its securities from the Official List is lifted without delay. Pace expects the suspension to be lifted shortly," the firm said.BC