3rd Feb 2014 07:39
LONDON (Alliance News) - UK stocks are set to open the month of February marginally lower Monday as risk aversion continues following January's poor stock market performance and ahead of bigger drivers to come this week.
China's official non-manufacturing PMI slipped to its lowest level since December 2008 in January, falling to 53.4 from 54.6 in December, according to data released overnight.
The Chinese New Year leaves the Chinese stock market closed Monday, but the Nikkei closed down almost 2%, the Australian stock market closed down more than 1%, and the further evidence of a slowdown in the Chinese growth will add to the emerging market concerns that has driven the FTSE 100 down by 3.5% in the year so far.
Spreadbetters are indicating the FTSE 100 to open 0.1% lower Monday at 6,482.00.
Chinese demand may well stay in focus Monday, with results already released by Randgold Resources showing falling revenues and income as the weak gold price.
Lloyds Bank has announced that it expects to make further 1.93 billion in provisions for mis-selling payment protection insurance and interest-rate hedging products, but also that it will make a small pretax profit, confirming it is in a much healthier position than fellow bailed-out UK bank RBS. Lloyds said that preparatory work has started on the sale of the next tranche of shares back to the public.
Also out this morning, interim management statements from Flybe, MITIE Group and Creston, as well as results from Future, RM PLC and SThree PLC.
In the economic data, European PMI's will be in focus this morning, with the Markit Manufacturing number due from Spain at 0813 GMT, Italy at 0843 GMT, France at 0848 GMT, Germany at 0853 GMT and the eurozone at 0858 GMT. The UK number is due at 0928 GMT.
The readings are likely to confirm the message that "euro area manufacturing activity strengthened in January, with Germany continuing to lead the way", say Lloyds Bank economic analysts.
In the afternoon, the US Markit Manufacturing PMI is due at 1358 GMT, followed by the ISM Manufacturing PMI at 1500 GMT. US Construction Spending numbers are due at 1500 GMT.
Bigger drivers lay ahead this week, with both the UK and European central banks meeting on Thursday. The possibility of action by the ECB is seen as having been heightened by Friday's disappointing eurozone inflation reading, which saw prices growing at 0.7% year-on-year.
On Friday this week, the latest US Non-Farm payroll unemployment report is released.
By Jon Darby; [email protected]; @jondarby100
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