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London pre-open: FTSE set to start week firmly lower

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London pre-open: FTSE set to start week firmly lower

Mon, 07 April 2014
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London pre-open: FTSE set to start week firmly lower
Tullow Oil Quote more

Price: 484.10

Chg: -9.90

Chg %: -2.00%

Date: 16:35

FTSE 100 Quote

Price: 6,463.55 Chg: 9.68 Chg %: 0.15% Date: 16:35

- Stocks to track US markets lower
- Germany industrial production higher than expected
- Ashley reportedly acquires 11 per cent stake in House of Fraser
- Caffé Nero to open 225 new stores

UK stocks are set to start the week on the back foot, dragged by declines seen in the US on Friday and in Asia overnight.

City sources predict the FTSE 100 will open around 47 points below Friday's close of 6,695.55.

After a decent start, US markets dropped sharply on Friday with heavy falls from biotech and internet stocks leading to the hard sell-off on the Nasdaq Composite.

The tech-heavy Nasdaq dropped 2.6%, pushing below its 50-day moving average and sparking the first drop in US-traded Chinese stocks in the past three weeks.

Meanwhile, figures were this morning released from Germany revealing that quarterly industrial output in Europe's biggest economy rose more than expected.

The Federal Statistics Office in Wiesbaden said seasonally adjusted production rose 0.4%, having gained a revised 0.7% in January. February's figure had been predicted to come in at 0.3%. Year-on-year, the figure jumped 4.8%.

It was reported over the weekend that Sports Direct owner, Mike Ashley, has purchased an 11% interest in House of Fraser in a a bid to disrupt the sale of the company to Chinese conglomerate Sanpower. Ashley, who also owns Newcastle United, reportedly acquired the holding from Sir Tom Hunter.

Meanwhile, Chuka Umunna, Labour's Shadow Business Secretary, has blasted government export schemes which has says have not helped a single company. The £1.5bn Direct Lending Scheme began seven months ago and the £5bn Export Refinancing Scheme launched in July two years ago, but hasn't actually started operating.

He said: "Ministers promised an export-led recovery, but the truth is that they are badly letting down British business. Scheme after scheme, which were supposed to help more firms export, have failed to have any impact whatsoever - and now we learn that two programmes which were announced to great fanfare two years ago haven't helped a single firm.

"We desperately need to get more businesses exporting to boost middle-income jobs, grow our way out of the cost-of-living crisis and so we can ensure Britain can compete."

In other news, coffee shop chain Caffé Nero has unveiled plans to create 1,700 UK jobs in the next five years on the back of 225 planned store openings.

Turning to today, Waterlogic is scheduled to release its full-year results, while Robert Walters will release a trading update. Spain is also due to release industrial production figures for February.

Looking further ahead, George Osborne will later this week address the International Monetary Fund over its criticism of his plans to reduce the deficit.

Meanwhile, Marks & Spencer is due to deliver its quarterly trading update on Thursday, which are expected by analysts to reveal a 1% drop in clothing, but a 0.1% increase in food sales. Clothing has declined steadily for the past 10 quarters. Investors are likely to be jittery in the lead up to the results given the retailer's notable discounting strategy in the past few weeks.

In this morning's company news, Tullow Oil announced it has refinanced its $500m corporate revolving credit facility to boost its balance sheet. The oil and gas company has increased the facility to $750m and extended the tenor to April 2017. It replaces the previous facility which was due to expire in November.

Sales at sausage maker Cranswick sizzled higher on stronger demand for pork, bacon and cooked meats, but the group said higher costs meant operating profit margins would be slightly below those a year ago.

Engineering and construction group Kentz has won a large contract for work on a liquid natural gas in Australia. The construction contract is worth A$615 (£344m) over a duration of 30 months, with work beginning in August.

AIM-listed optical components and systems manufacturer Gooch and Housego (G&H) said trading in the last six months was in line with management expectations, following good growth in its main markets and as it pushes ahead with streamlining its operations.

UNITE Group, the student accommodation firm, has announced that its joint venture Oasis Capital (OCB) is selling its portfolio of three London assets. OCB, in which UNITE holds a 25% stake, is a five-year joint venture set up in 2009 to develop and manage three London properties: Woodland Court, Wedgwood Court and Great Suffolk Street.

NR

FTSE 100 Top Risers

Name Last Chg.% Time
St James's Place 712.50 3.56 17:09
Smith & Nephew 1,054.00 3.54 16:55
Friends Life Group Limited 313.80 2.62 17:03
Mondi 1,037.00 2.37 16:41
Shire Plc 4,164.00 2.18 17:11

FTSE 100 Top Fallers

Name Last Chg.% Time
Randgold Resources Ltd. 3,779.00 -6.02 17:09
Standard Chartered 943.60 -4.89 17:09
Fresnillo 716.50 -4.34 17:09
Anglo American 1,320.50 -2.37 17:09
Glencore 317.10 -2.04 17:09