London pre-open: Stocks to slip marginally lower early on

2nd Apr 2014 07:39

UK stocks are expected to inch lower in early trading following yesterday's strong gains, ignoring a positive performance seen in both the US and Asia overnight. City sources predict the FTSE 100 will open around five points lower than yesterday's close of 6,652.61.US stocks finished strongly on Tuesday with the S&P 500 reaching another record high as a pick-up in domestic manufacturing growth and auto sales gave sentiment a boost.Investors were also still reacting to comments from Federal Reserve Chair Janet Yellen who on Monday said that the central bank's "extraordinary support" for the recovery would continue. Back in the UK, the FTSE rose strongly in yesterday's session on the back of the US data and a report which showed growth in Chinese manufacturing, while investors shrugged off a worse-than-expected report on UK manufacturing. Wednesday's session is expected to be a fairly quiet one in terms of economic releases, as investors look ahead to tomorrow's European Central Bank meeting and Friday's job report. According to Danske Bank, today's ADP US Employment Report is expected to show an increase of 195,000 private sector payrolls in March. It explained that the reading "has generally been more stable than the non-farm payrolls and may be a better indicator of the true state of the labour market". Another release on US factory orders is forecast to reveal growth in February.Also on the cards is the Ecofin meeting with the EU banking union at which European politicians will discuss financial assistance for Ukraine. The US has already agreed to loan $1bn and has imposed a number of sanctions on Russia following the annexation of Crimea last month. In this morning's company news, it was revealed that first half-profits were trimmed at fashion e-tailer Asos due to increased investment in sales capacity to create a "truly global business" that can turn over £2.5bn a year. Profits before tax were down 22% to £20.1m, but ahead of some analyst forecasts, with revenues increasing 34% to £481.7m.Transport firm FirstGroup said it made good performances in four of its divisions, partially offset by slower progress in First Student, and is broadly on track to achieve medium-term targets. In a trading update ahead of its full-year results, the FTSE-250 firm said overall operating profit was in line with expectations for the year, excluding the £14m impact of unprecedented weather conditions on First Student and Greyhound in the fourth quarter.Domino's Pizza reported a 10.8% increase in like-for-like sales at its 725 UK stores in the first quarter, driven by improved weather and the success of its Winter Survival meal deal. Last year the company was affected by snow when sales increased 6.6% at its 670 UK stores.NR