LONDON (Alliance News) - London shares are called for a positive open Monday, despite Chinese stocks trading in the red after the re-opening of the Shanghai market, while Wall Street will be closed for the US Labor Day celebration.
IG says futures indicate the FTSE 100 to open at 6,089.50 points. The index ended down 2.4% at 6,042.92 Friday, meaning it lost 3.3% for the week as a whole.
The Japanese Nikkei 225 index closed up 0.4%, while in China, the Hang Seng is down 0.4% and the Shanghai Composite is down 1.1%.
China has revised down its annual economic growth rate for 2014 to 7.3% from 7.4%, Reuters reported, citing the country's National Bureau of Statistics.
Gross domestic product for the country stood at CNY63.6 trillion for the year, or GBP6.6 trillion, cut by CNY32.4 billion from the initial estimate. The fall in the growth rate was hit by a downward revision of growth in the country's services sector, down 0.3 percentage points to 7.8%. Growth in the country's primary sector, agriculture, was 4.1% for 2014, while growth it its secondary sector, covering manufacturing and construction, was 7.3%.
The meeting of the G20 finance ministers and central bank governors that concluded in Ankara on Saturday expressed concern that global growth falls short of their expectations. The participants pledged to take decisive action to keep the economic recovery on track.
In a statement released at the end of the meeting, they said, "we are confident the global economic recovery will gain speed. We will continue to monitor developments, assess spillovers and address emerging risks as needed to foster confidence and financial stability," avoiding a direct reference to China.
Wall Street also ended down on Friday, after a mixed US labour report that left analysts none the wiser whether the US Federal Reserve will raise US interest rates this month or later in the year. The DJIA closed down 1.7%, the S&P 500 down 1.5% and the Nasdaq Composite down 1.1%.
The US Labor Department reported much weaker than expected US job growth in the month of August. It said non-farm payroll employment climbed by 173,000 jobs in August, well below the increase of 220,000 jobs anticipated by economists. However, the report also showed upward revisions to the job growth seen in both June and July, with the revised data showing increases of 245,000 jobs in each month.
The report also said the US unemployment rate edged down to 5.1% in August from 5.3% in July, while economists had expected the rate to dip to just 5.2%.
"With the overwhelming majority of Fed officials stressing the fact that the Chinese developments have not really altered the outlook, the Chinese representatives at the Ankara meeting appeared reassuring regarding further yuan devaluation and the stock market correction," said Lloyds Bank. "If the various Chinese data this week support their claims for 7% growth going forward, then the sentiment going in the [US] Federal Open Market Committee meeting could be massively different compared to 2 weeks ago."
On the UK corporate front, Glencore outlined plans to improve its financial position, including a USD2.5 billion capital raising plan and multiple capital preservation and debt reduction measures it will take, worth up to a combined USD10.2 billion in cost savings.
The multi-commodities miner and trading company, which is the worst performing stock in the FTSE 100 this year, said the USD2.5 billion fully-committed equity issue will be used to cut its debt pile and to increase its financial strength.
Grocer Tesco said it has struck a deal to sell its discount home products store chain Homeplus business in South Korea to a consortium led by private equity group MBK Partners for GBP4.24 billion.
The FTSE 100 supermarket chain said it has sold the company to the MBK-led consortium, which also includes Canada Pension Plan Investment Board, Public Sector Pension Investment Board and Temasek Holdings, following an auction process which has been running for the past few months and which attracted the attention of a number of prominent private equity suitors.
Tesco said it will get a total of GBP4.0 billion in cash before tax and other transaction costs from the sale and said the deal will allow it to significantly reduce its GBP4.23 billion debt pile. It expects the sale to complete in the fourth quarter of the year, conditional on it securing shareholder and regulatory approval.
Associated British Foods said its expectations remain unchanged for a decline in adjusted operating profit in its current financial year.
The group, which owns discount fashion retailer Primark and British Sugar and which operates an agriculture and consumer goods arm, said that a rise in operating profit at constant currency in grocery, agriculture, ingredients and retail will be offset by a decline in the sugar business, which along with changes in foreign exchange rates will lead to an overall fall in adjusted operating profit for the full year. The company's financial year ends on September 12.
Irish building materials company CRH said it has appointed Senan Murphy as its group finance director, effective from January 4, 2016. CRH said Murphy will take over from Maeve Carton, who will move to the role of group transformation director. Murphy joins from Bank of Ireland Group, where is currently chief operating officer. He has worked for Ulster Bank, Airtricity and General Electric in the past.
Meanwhile, UBS cut Centrica to Sell from Neutral, while Bernstein lifted the energy company to Outperform from Market-Perform, according to traders.
In the economic calendar, eurozone's Sentix investor confidence is due at 0930 BST.
By Daniel Ruiz; danielruiz@alliancenews.com
Copyright 2015 Alliance News Limited. All Rights Reserved.
