28th Jan 2014 07:30
LONDON (Alliance News) - UK stocks are expected to open slightly higher Tuesday, following a more positive lead from Asian markets and ahead of the latest UK GDP numbers.
Following a three-day slump that has seen 4.0% wiped off the value of the FTSE 100, spreadbetters are indicating the blue chip index to open marginally higher Tuesday, at 6,565.00. The index closed at 6,550.66 Monday.
US markets closed lower again on Monday, with the DJIA down 0.3% and the S&P500 down 0.5%, while the Nasdaq Composite closed down 1.0% and is called to open lower again later Tuesday, as Apple shares drag the Nasdaq index lower. Apple actually beat its first-quarter earnings forecasts but revised down its second quarter outlook by between 4%-8%.
The UK will take its lead from Asia, where shares have performed slightly better overnight. The Shanghai Composite is up 0.2% and the Hang Seng up 0.1%, while the Nikkei is down 0.2%.
As the decline in emerging market currencies continues, central banks have begun to take action, with the Reserve Bank of India taking the lead last night by increasing interest rates by 25 basis points to 8%. The Turkish central bank will meet later Tuesday to discuss whether similar action is necessary there.
In the UK, the main economic focus Tuesday is the release of fourth-quarter UK GDP numbers at 0930 GMT. The initial reading is expected to show quarterly growth for 0.7%, which would be equivalent to 2.8% growth year-on-year.
"Such a reading would help cement the view that the UK recovery is real, and reinforce developed markets' appeal over emerging markets," says Rabobank analyst Michael Every.
In the afternoon, US Durable Goods Orders are released at 1330 GMT, followed by the US Consumer Confidence survey and the Richmond Fed Manufacturing index at 1500 GMT. Consumer confidence is expected to have increased slightly to 78.9 in January, from 78.1 in December, while the manufacturing index is expected to have remained stable.
In UK corporate news, F&C Asset Management have agreed acquisition terms with the Bank of Montreal, following the takeover offer on Monday that saw the F&C share price jump 25%. British Land PLC, Carpetright PLC and Greencore PLC have all released interim statements, with Carpetright issuing another profit warning. Meanwhile, Fresnillo PLC has put out a fourth-quarter production report showing gold production in line with its forecasts.
By Jon Darby; [email protected]; @jondarby100
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