City sources predict the FTSE 100 will open around 70 points lower than Friday's close of 6,512.66, after US leaders hit a stalemate over budget negotiations in Washington. Politicians have so far failed to agree a new spending bill and have only until midnight tonight to make a decision over an extension to the current debt-ceiling limit of $16.7tn to avoid a government shutdown. The developments (or lack of) have sent stock markets around the world plunging, with those in Europe also hit by the news Enrico Letta, Italy's centre-left Prime Minister, is urgently seeking parliamentary support for a new government after centre-right leader Silvio Berlusconi pulled his ministers out of their five-month-old coalition, risking a financial market backlash.Meanwhile, key data out from China this morning missed expectations; this month's reading of the China HSBC Purchasing Managers' Index came in at 50.2, significantly below estimates of 51.2. A readings of 50 separates expansion and contraction. HSBC China Chief Economist, Hongbin Qu, said: "The September HSBC China Manufacturing PMI edged up slightly from August. New orders remained flat from the previous month, while external demand improved. "Manufacturers restocking process continued but remained relatively slow. Growth is bottoming out on Beijing's mini-stimulus. We expect continuous policy efforts to sustain the recovery." Back in the UK, Chancellor George Osborne have unveiled a new 'work for benefits' plan, under which those claiming benefits for more than two years will be made to take up unpaid work placements. In company news, Spectris, which supplies precision instrumentation and controls, has agreed to buy NanoSight, which manufactures instruments for the scientific analysis of nanoparticles, for a debt and cash-free net consideration of £15m.Emergency domestic repairs group Homeserve said its outlook for the full year remains unchanged, helped by growth at its International business. Earnings in the first half of the full year 2014 are expected to be broadly similar to last year's £25.6m.Keller Group, the ground engineering specialist, has scored a contract for the construction of a diaphragm wall and bored and secant piles. Under the £33m deal, the group will construct the foundation of a new Sengkang hospital project for the Singapore Ministry of Health.KCOM Group, the communications solutions provider, said that it performed in line with expectations during the first half ended September 30th. In a brief trading update on Monday, KCOM's Executive Chairman Bill Halbert said that the group continues to make progress towards achieving its long-term objectives.NR