London pre-open: UK stocks to open lower ahead of central bank speeches

17th Oct 2014 07:40

Thanks to a weak performance from Japan and a mixed picture in the US overnight, London-listed stocks are expected to move lower once again at Friday's opening bell.City sources predict the FTSE 100 will open around 10 points below Thursday's close of 6,195.91.US stocks rebounded on Thursday on bullish from remarks from Federal Reserve officials, a day after crashing on global economic concerns.St. Louis Fed Bank President James Bullard said the central bank should consider extending its bond-buying beyond the expected end-date of October following a recent drop in inflation expectations. He also told Bloomberg News that US economic fundamentals remain strong.CMC Markets chief market analyst Michael Hewson said: "The current uncertainty in markets was no better illustrated by the sharp reaction to comments from [...] Bullard yesterday, when he suggested that that the end of quantitative easing (QE) should be delayed if necessary, which might suggest a deep anxiety at the heart of the US central bank with respect to the slowdown in global growth, and perhaps the recent strength of the US dollar, pushing down US inflation expectations. "We already know from the last Federal Open Market Committee minutes that the Fed is concerned about Europe, and given recent events maybe that concern is rising amongst some of the members. Bullard did then go on to contradict himself somewhat by going on to say that the hard data on the US economy had been good, which begs the question why consider extending QE."Fed chair Yellen also made positive remarks about the durability of US economic expansion behind closed doors at the weekend, which came to light in reports on Wednesday.Friday's session will see very few data releases, with the attention remaining on the words offered up by various key speakers.European Central Bank (ECB) official Vitor Constancio speaks in Frankfurt at 08:45 London time while the ECB's Ewald Nowotny speaks in Vienna at the Gewinn Messe Retail Fair at 09:00. The market will be looking for remarks on policy as the ECB comes under the microscope for its efforts to boost the ailing euro-area recovery.Federal Reserve chair Janet Yellen will address a Boston conference in afternoon trading, although as the focus of this is on inequality she is unlikely to offer any hints on monetary policy.A small handful of data releases will include Eurostat's first gross domestic product estimates after the European System of National and Regional Accounts 2010 adoption, US housing starts figures and the University of Michigan's US consumer confidence report.In company news, oilfield services group Petrofac said it is on track to hit profit targets this year, as its backlog improved over the third quarter and net debt reduced. The company said that activity levels have stepped up over the second half, as expected, as it retained its guidance for net profits of $580m-600m for 2014, though this remains down on $650m the year before after a profit warning earlier in the year.Like-for-like sales continued to slow for UK building merchant Travis Perkins in the third quarter but it gained market share amid some challenging conditions. Comparative results from the year before grew tougher as total sales grew 6.9% and like-for-like sales grew 5.7%, down from 8.1% in the second quarter.International banking group Old Mutual (OM) has announced that its UK retail investment business Old Mutual Wealth (OMW) will acquire investment managing firm Quilter Cheviot for £585m. The OM board has claimed the acquisition will complement OMW's existing business strategy and add financial benefit to the group and its shareholders.