London pre-open: Gains expected ahead of economic data


LONDON (ShareCast) - UK stocks are expected to rise on Tuesday morning (Frankfurt: TDM.F - news) following a strong finish on Wall Street last night after comments from Federal Reserve Chair Janet Yellen.

City sources predict the FTSE 100 will open 28 points higher than Friday's close of 6,598.37.

Tuesday will be a data-heavy session for financial markets with manufacturing purchasing managers' indices (PMIs) due out in the UK, Europe and US, along with the unemployment rate in the Eurozone.

Over in China overnight, the government's official manufacturing PMI increased from 50.2 to 50.3 in March, while HSBC's own manufacturing PMI slipped from 48.1 to 48; both numbers were in line with consensus forecasts.

US stocks gained strongly on Monday evening after Yellen pledged continued "extraordinary support" for the US economy, saying that there is still significant room for improvement and "considerable slack" in the labour market. She said that the Fed would continue to support the recovery "for some time to come".

Speaking at a conference in Chicago, she said: "This commitment is strong, and I believe the Fed's policies will continue to help sustain progress in the job market."

Stocks to watch

BHP Billiton (NYSE: BBL - news) , the world's largest mining group, has responded to market speculation about a potential de-merger of non-core operations, saying that a "simplification of our portfolio is a priority". The company did not dismiss recent reports that it is considering a $20bn spin-off of its less-profitable assets of aluminium, manganese, thermal coal and nickel.

Babcock has confirmed it had been named preferred bidder on a 21-year contract with the London Fire Brigade. The FTSE 100 company successfully took over the management of the LFB's fleet of vehicles on an interim contract in November 2012 and the new long-term contract is expected to become operational on November 13th this year.

Interdealer broker ICAP (LSE: IAP.L - news) said overall results for the year are expected to be in line with current market consensus forecasts, as it battles against the weak global economy, regulatory reforms and low interest rates. The money broker said overall trading activity levels in the Global Broking division have declined, in line with general market trends, since its last trading update in February.

Oil and gas services company Wood Group (Frankfurt: JWG1.F - news) said it has bought Sunstone Projects for 14.5m Canadian dollars. Sunstone, based in Calgary, Canada, is a pipeline consulting company providing engineering, procurement and construction management services to the oil and gas sector.

Jupiter Fund Management is to dispose of its Private Client & Charities operations to Rathbone Brothers (LSE: RAT.L - news) after a strategic review. The private client assets, which represent 7% of Jupiter's £31.7bn under management, are being offloaded to Rathbone Investment Management for £43m, assuming all the £2.1bn of in-scope client assets transfer to Rathbones.


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