LONDON (Alliance News) - UK stocks are set to open marginally higher Tuesday, as European markets play catch-up with Wall Street, which made gains over the long Easter weekend despite ongoing tensions in Ukraine.
Spreadbetters are indicating that the FTSE 100 will open slightly higher Tuesday, after closing on Thursday at 6,625.25 points, with CMC markets calling the index up by 28 points, and Alpari UK calling for a jump of 26 points.
US markets posted solid gains on Monday, with the S&P 500 closing up 0.3% and the DJIA closing up 0.4%, as markets appeared to shrug off the breakdown of the deal reached in Geneva for ending the ongoing crisis in Ukraine.
Russian Foreign Minister Sergei Lavrov on Monday accused Ukrainian authorities of violating the recent accord. Lavrov told reporters in Moscow that the government in Kiev has not acted to disarm illegal militants, especially the ones belonging to ultra-nationalist Right Sector.
Lavrov's remarks came a day after at least three people were killed in a shooting incident at a checkpoint manned by pro-Russian separatists near Sloviansk in eastern Ukraine.
"As long as the situation in Ukraine manages to stay contained to the occasional fire fight then market attention is likely to be more focussed on the latest company earnings reports from both side of the Atlantic," said CMC Markets chief market analyst Michael Hewson.
Tuesday's economic and corporate calendars allow a fairly quiet return from the long weekend for UK investors. But amid continued concern over stretched stock valuations, particularly in the technology sector, results due on Wednesday in the US from both Apple and Facebook are likely to be of particular market interest. Equally, in the UK on Wednesday, first quarter numbers from ARM Holdings, chip maker and supplier to Apple, will be closely watched.
Merger and acquisition activity is in focus, amid reports that US pharmaceutical giant Pfizer Inc. offered to acquire rival UK drugmaker AstraZeneca PLC for USD101 billion. The Sunday Times reported the takeover news, citing senior investment bankers and industry sources. While the offer has reportedly been rejected, the market is now anticipating an increased offer from Pfizer.
GlaxoSmithKline said Tuesday that it has signed a three-part inter-conditional transaction with Novartis AG which will see it sell off its Oncology portfolio, acquire Novartis' global Vaccines business, and create a dually-offered Consumer Healthcare business. The series of transactions by the pharmaceutical giant are said to be valued at more than USD25 billion.
The UK banks may also be in focus following a weekend report in the Financial Times that Barclays is set to wind down large parts of its commodity trading business, due to lower revenues and increased scrutiny from regulators.
In a fairly light economic calendar Tuesday, the eurozone consumer confidence survey at 1400 GMT is likely to be the highlight. Ahead of that, eurozone construction output data is due at 0900 GMT, and afterwards, US existing home sales data is due at 1400 GMT. There is no UK data scheduled.
By Jon Darby; jondarby@alliancenews.com; @jondarby100
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Astrazeneca (AZN)
Barclays (BARC)
Glaxosmithkline (GSK)