London pre-open: Strong start expected after Syria delays, China PMI

2nd Sep 2013 07:26

Markets are expected to open with strong gains on Monday morning due to easing concerns over tensions between Syria and the West, for now at least.Also helping sentiment this morning is China's official manufacturing purchasing managers' index (PMI) which rose to the 51.0 point mark in August, according to the National Bureau of Statistics and China Federation of Logistics and Purchasing in Beijing. The consensus estimate had been for a reading of 50.6 and comes after a print of 50.3 in July.Financial Sales Trader Lee Mumford from Spreadex said: "Chinese economic data figures showed an increase in Chinese manufacturing, rising to a 16-month high in August. The positivity has helped push metal prices higher which will no doubt filter through to UK mining companies this morning."City sources predict the FTSE 100 will open up 49 points from Friday's close of 6,412.93.Fears of imminent US military action against Syria were calmed over the weekend after President Barack Obama said he would seek approval from Congress before signing off on a strike."Obama, like his UK counterpart, David Cameron, is likely to face staunch opposition from both inside and outside his party, to military action, with memories of the hugely unpopular war in Iraq still fresh in people's memories," said Market Analyst Craig Erlam from Alpari."Investors are unsurprisingly pleased with this delay, with the risk aversion seen towards the end of last week subsiding and money pouring back into European stocks," he said. Stocks to watchVodafone said it was in "advanced" talks with Verizon Communications about selling its US business to Verizon for $130bn (£84bn). The US arm's main asset is its 45% stake in Verizon Wireless, the biggest US mobile network. Verizon Communications would mainly pay in cash and shares.Tullow Oil has plugged and abandoned its Buzio-1 exploration well offshore Mozambique after failing to encounter hydrocarbons. The well, which is the second deepwater exploration well in Area 2, was drilled to a total depth of 3,333 metres in water depths of 1,534 metres.Diversified mining group Rio Tinto has loaded the first shipment of iron ore from its expanded port, rail and mine operations in Australia. Rio said this was a "significant milestone" and marks the start of commissioning of the expansion programme, which is expected to see the company's iron ore operations in Western Australia increase capacity to 290m tonnes a year.BC