AM Analysis: “Chinese stocks under pressure” – Lee Mumford
The FTSE is seen opening 20 points lower following a negative session in Asia. Chinese stocks were under pressure following a local media report that stated medium-sized banks are tightening its financing to property developers. The tightening, which is likely to remain until end of March, is viewed as a negative in the short-term as the authorities try increase the quality of credit on offer to help overall growth.
Natural gas rallied to its highest level in five years as analysts boosted the energy demand outlook following the frigid weather. Inventory data showed that supplies dropped to the lowest in a decade, advancing as much as 5.6 percent overnight.
Headline currencies remained steady ahead of the European open as political unrest in Ukraine showed signs of settling down. Ukraine’s parliament voted on Saturday to remove President Viktor Yanukovich, with freed YuliaTymoshenko as the replacement.
On the quiet economic front, Germany IFO Business Survey is scheduled to report at 09:00 GMT. With Germany being Europe’s leading economy, analysts will play close attention to the figure to see if Germany remains on track to economic expansion.
Developments during the Group of 20 nations showed that monetary policy should remain accommodative for now as economies pledge to boost growth by more than $2 trillion over the next five years.
PM Analysis: “FTSE dragged down by HSBC” – Sam Fox
The FTSE 100 has stayed down around 20 points from this morning, dragged down by Europe’s largest bank, HSBC. The Bank has today released its full year results and despite them reporting pretax profits have increased, this wasn’t enough to drive the share price up and has instead fallen over 4% after the reported numbers didn’t meet market expectations. Similarly, RSA Insurance hasn’t helped the index gain momentum after the company dropped nearly 4% off its share price today after revealing they are set to raise £800m through a rights issue.
Economic data has been thin today with the German Ifo Business Climate figure being the only notable piece of data. The figure came in above expectations at 111.3, up from the forecast of 110.7. With the economic calendar picking up tomorrow, the figures may be the catalyst to move the markets.
Dixons Retail and Carphone Warehouse have announced they are in merger talks which if went ahead would form a £3.4bn group and would see the merged group on the FTSE 100 constituents list.
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