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London pre-open: Stocks seen down ahead of Spring Statement, US inflation

Tue, 13th Mar 2018 07:42

(ShareCast News) - London stocks were set for a lower open on Tuesday following an uninspiring session in the US, as investors eyed Chancellor Philip Hammond's Spring Statement and the latest inflation reading from across the pond.

The FTSE 100 was called to open down 10 points at 7,204.

Jasper Lawler, market analyst at London Capital Group, said: "With a light economic calendar this morning, market participants will cast a glance to Chancellor Philip Hammond's Spring Statement. There will be no spending or tax announcements meaning this is expected to be a non-event from the start. The only area of real interest could be the updated OBR economic and public spending forecasts, which could provide a small injection of volatility into the pound."

The US consumer price index for February at 1230 GMT will also be in focus.

Lawler said: "Inflation will return to the spotlight today, after weak growth data on Friday calmed market fears that the Fed would need to hike rates more aggressively than initially thought. Whilst just one month earlier, following better than forecast wage data, a wave of concern over higher inflation and higher interest rates sent market volatility soaring and US equity indices into correction territory.

"This time round the market conditions are quite different. Friday's weaker than forecast wage data has meant that market fears of a faster pace of rate hikes have eased, although sensitivity to inflation data is expected to remain high."

In corporate news, Antofagasta increased its dividend 177% for last year as cash flow surged, though the Chilean copper miner is facing strike action at its Los Pelambres mine.

Looking ahead, the crucial events on FTSE 100 giant's horizon in 2018 are the review and expected approval of the major expansion project at Los Pelambres and progressing expansion plans at Centinela.

Legal & General Group announced that its Legal & General Capital division has acquired the 52.1% of CALA Homes which it did not previously own.

The company said the business had performed "strongly" under joint ownership with Patron Capital Partners, with revenues growing threefold to 748m in 2017 from 241m in 2013, and profits growing at a compound annual growth rate of 12% over the last three years. It said the acquisition cost of the 52.1% share capital was 315m, plus additional transaction costs and financial adjustments to reflect the contribution of management and Patron during the period of joint ownership.

Old Mutual said it would resist a claim made against it in the US by Travelers and St Paul Fire and Marine Insurance related to dispose of assets.

The financial services group said the insurers had "lodged a claim in the United States District Court for the Southern District of New York in relation to pre-existing plc head office legacy items relating to previously disposed of US assets".

International plastics engineer RPC Group said it had bought polythene film maker Nordfolien for 75m.

The purchase is being funded from RPC's existing debt facilities and represents a pre-synergy EBITDA multiple of around seven times. Nordfolien is expected to report revenue of 130m for the same period.

RPC said the acquisition would not impact its 100m share buyback programme, currently underway.

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