28th Apr 2014 06:41
LONDON (Alliance News) - UK stocks are set to open marginally higher Monday, although investors are likely to take a cautious approach to the start of the week given a lack of new economic data and amid increased tensions in Ukraine over the weekend.
Last week, trading was largely dominated by the numbers coming out of the US first quarter earnings season. Some better-than-expected profits from big technology names, including Facebook and Apple, reassured investors over stock valuations and helped support equities. However, towards the end of the week, concerns about an escalation of the situation in Ukraine returned, and on Friday the FTSE 100 closed down 0.3% at 6,685.69. Given events over the weekend these concerns are likely to continue to weigh on sentiment.
Pro-Russian separatists took control of a TV station in the eastern Ukrainian city of Denetsk on Sunday, apparently with the intention of broadcasting Russian state television. The latest escalation comes after a number of international observers were kidnapped by the militants, who accused them of being NATO spies.
Officials in the US and the EU are meeting Monday to discuss potential further sanctions on Russia, which is accused of orchestrating the separatist actions. Russian President Vladimir Putin's inner circle will be targeted in the next round of sanctions that the US imposes over the Ukraine crisis, a White House security adviser said Sunday.
US markets closed lower on Friday, the DJIA and the S&P 500 both down about 0.8%, and the Nasdaq Composite down 1.8%.
Asian markets have slipped Monday, with the Nikkei down 1.1%, the Hang Seng down 0.3%, and the Shanghai Composite down 1.5%.
While markets will have an eye on the announcement of any new sanctions, spread betters are indicating that the FTSE 100 will open marginally higher Tuesday, up 10 points at 6,896.
"The ongoing crisis in the Ukraine is the biggest threat to the rally in the markets right now, but with no significant escalation being seen right now, it's not being too much of a hindrance," said Alpari market analyst Craig Erlam. "Clearly if the crisis develops further, for example with Russian troops crossing the eastern border, we'd see investors attitudes change rapidly, with them becoming far more risk averse."
There is very little in the calendar to shift sentiment Monday, with no scheduled releases from UK corporates and no top tier UK or European economic data.
Continued merger and acquisition news may provide a boost, however, with US pharmaceutical company Pfizer confirming early Monday that it is indeed considering an increased offer for AstraZeneca. Speculation of such a deal saw AstraZeneca's share price rise by as much as 20% last week.
A continued appetite for new listings on the London Stock Exchange sees footwear retailer Shoe Zone become the latest to announce its desire to list on AIM. Shoe Zone is looking to raise up to GBP50 million in an IPO on London's AIM market in May in a flotation which would value the company at between GBP90 million and GBP100 million, according to The Times newspaper.
German import prices slipped by 0.6% month-on-month in March, accelerating from the 0.1% drop recorded in February, and faster than the 0.2% drop expected by economists.
US pending home sales data is due at 1400 GMT, followed by the Dallas Fed manufacturing business index at 1430 GMT.
Major currency pairs have remained in their recent tight ranges. Against the dollar, the pound currently trades at USD1.6807 and the euro at USD1.3820.
By Jon Darby; [email protected]; @jondarby100
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