LONDON (Alliance News) - UK stocks are set to open lower Monday following the strong gains seen toward the end of last week as the focus switches away from Scotland and to the wider issue of growth in the eurozone.
UK stocks put in a strong performance Friday, enjoying a relief rally on the news that Scotland voted convincingly in favour of remaining part of the UK at the referendum Thursday. That euphoria is expected to fade quickly, and stocks are called lower Monday.
Adding to the negativity at the start of the week, Tesco has surprised the market by announcing that it overstated its first half profit guidance by GBP250 million, and has hired Deloitte to look into the accounting error.
Futures indicate that the FTSE 100 will open 30 points lower at 6,807.
In the US, stocks went on to put in a mixed performance Friday amid the much-hyped initial public offering of Chinese e-commerce business Alibaba. The company priced its IPO at USD68 per share, valuing the group at USD21.8 billion and making it the biggest IPO in US history. Huge demand saw the stock gap higher at the open and close up 38% at USD93.89.
Overall stocks were mixed, however, with the DJIA closing up 0.1%, but the S&P 500 down 0.1%, and the Nasdaq Composite down 0.3%.
Asian stock have had a negative session Monday, with the Nikkei closing down 0.7%, while the Hang Seng and the Shanghai Composite both continue more than 1.0% lower.
The issue of sluggish economic growth across the eurozone will be back in focus Monday, with European Central Bank President Mario Draghi due to speak at 1300 BST Monday at the Quarterly Hearing before the Committee on Economic and Monetary Affairs of the European Parliament in Brussels.
The eurozone consumer confidence index for September will be released at 1400 BST, while US existing home sales data will be published at the same time. Otherwise it's a fairly quiet start to the week in term of economic data, with nothing due for release from the UK.
Outside of the surprise update from Tesco, from the UK corporate calendar Friday, a trading statement has been released by FTSE 250-listed Dairy Crest, while small-cap suit-maker Moss Bros and AIM-listed water cooler business Waterlogic have released interim results.
The changed announced at the recent FTSE index review take effect Monday, meaning Direct Line Insurance Group and Dixons Carphone join list in the FTSE 100, pushing Rexam and Barratt Developments down into the FTSE 250. A full list of the index changes can be found below:
http://allapp.alliancenews.com/article?u=503290181c7247de8c96b676d452d246&a=1409762717722165600
By Jon Darby; jondarby@alliancenews.com; @jondarby100
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