London pre-open: Stocks to slip on Sainsbury Q4, latest from Crimea

18th Mar 2014 07:40

The Footsie is set to start the day by edging lower, as investors digest a poor quarterly update from Sainsbury together with reports the accession of Crimea has been approved by Russian powers. City sources predict the FTSE 100 will open 10 points lower than yesterday's close of 6,568.35.Russian President Vladimir Putin has ordered the approval of an accord on the accession of Crimea to the Russian Federation, Bloomberg TV reported this morning. The news follows the weekend's vote by Crimea to join the Russian Federation. However, more positive news came from US last night, where stocks recovered from last week somewhat after investors applauded a better-than-expected reading of industrial production. The Dow Jones Industrial Average rose 1.1% to 16,247, the Nasdaq finished 0.8% higher at 4,280, while the S&P 500 increased 1% to 1,859, turning positive for the year to-date.According to Market Analyst, Craig Erlam, "what we saw yesterday was a relief rally in the markets following all of the uncertainty over the weekend around how the US and Europe would respond to Russia's attempts to illegally take control of the Crimean peninsula". He explained: "The concern here was that if the West imposed harsh sanctions, the Kremlin may feel it needs to retaliate. This could escalate things very quickly and make a diplomatic solution even harder to come by, which is something that would not benefit anyone. "As it turns out, we had nothing to worry about as the sanctions agreed upon by the US and Europe were pretty weak and highly unlikely to prevent Vladimir Putin from taking control of Crimea. What we've seen here is the West's unwillingness to take on Putin as it knows that he can also cause them significant pain. In effect, the West has shown its hand and it's not very good." He did, however, acknowledge that the situation could of course worsen, for example a reduction in Russia's oil exports, but said if these sort of actions were avoided stocks could be in for a "fairly decent" week. Over in China the situation was less positive after another company, this time a real-estate developer, revealed it was on the brink of default. On the cards today are the March ZEW economic sentiment figures, with both Germany and the Eurozone as a whole expected to slow a slight drop but remaining in positively territory, to 53 and 67.3, respectively. Sainsbury Q4 worse than expectedSainsbury's fourth quarter was worse than analyst expectations, against a very tough comparative period, as the supermarket group confirmed that the market was growing at its slowest for eight years. Like-for-like sales fell 3.8%, or 3.1% if fuel is excluded, with total sales down 1.5%, or 1% ex-fuel.Antofagasta lowered its total dividend for 2013 as revenues declined, reflecting a drop in the price of commodities. The company recommended a final dividend of 86.1 cents per share, bringing the total dividend to 95 cents, down 3.6% on the prior year. Analysts had expected the dividend to remain unchanged from 2012.Insurance mogul Clive Cowdery, the founder and former Chairman of Resolution, has decided to step down from the board as the company unveiled a big jump in profits for 2013. Cowdery, along with fellow non-executive director and former FSA head John Tiner, have both announced that as founders of the company it is the "right time" to leave given that it has completed its restructuring phase. Resolution said that they have decided not to stand for re-election as non-executive directors at the annual general meeting in May.Support services giant Carillion has been awarded a £61m contract to deliver the first phase of the Dubai Trade Centre District (DTCD), a 146,000 square metre development between the current Dubai International Convention and Exhibition Centre and Emirates Towers. It includes an eight storey office building and a 588-room business and tourism hotel, will begin in April 2014 and is scheduled for completion in the third quarter of 2015.UK housebuilder Berkeley Group said a more positive trading environment, a period of wider economic growth as well as the government's Help to Buy scheme has boosted activity in the property market. As a result, the group reiterates its previous guidance that full-year earnings are likely to be towards the top of the range of analysts' current expectations.NR