London pre-open: FTSE to slump at opening bell

14th Jan 2014 07:02

- Drop of 37 points expected early on- S&P 500 registers worst performance in two months- Focus on UK inflationCity sources predict the FTSE 100 will open 37 points below yesterday's close of 6,757.15, tracking declines seen in the US overnight, which saw the S&P 500 register its poorest performance in a single day for two months, as uncertainty regarding the Federal Reserve's stimulus programme weighed heavily on sentiment.In spite of Friday's much worse-than-expected jobs report, overnight Atlanta Fed President Dennis Lockhart said in a speech that he supports "similar tapering steps" as the one taken in December, adding that the economy is on a "solid footing"."The prospect of another reduction of stimulus at the end of this month, set against rather lofty valuations has seen investors decide to take some money off the table in a week that sees US earnings start to come in thick and fast," said Michael Hewson, Chief Market Analyst at CMC Markets.Meanwhile, back in the UK today's focus will be on inflation data, including consumer price index, retail price index and producer price index, although the most important figure is the first, CPI. The UK CPI for December is expected to have risen 2.1% year-on-year in December, in line with the prior month, according to the consensus forecast. That comes at a time when at least some market observers are increasingly watching against the risk of even lower inflation readings in the Eurozone and even in the US. Later in the day, Stateside, data on retail sales is anticipated to show a gain of 0.1% month-on-month in December, following an increase of 0.7% in November. Policymakers are closely watching the ebb and flow of economic statistics to gauge the health of the world's biggest economy ahead of the Federal Reserve's policy meeting at the end of the month. The central bank began winding back asset purchases by $10bn a month to $75bn in December and said it would continue to taper provided the US continues to show steady recovery.Stateside, JP Morgan and Wells Fargo will release their latest quarterly numbers this afternoon. Analysts at Exane have reportedly downgraded their view on shares of BT Group to underperform. RBS has beendowngraded to underpform at RBC.In today's company news, biopharmaceutical giant AstraZeneca has said it expects to return to growth sooner than analysts currently predict. Chief Executive Officer Pascal Soriot said that the company has made good progress in accelerating and replenishing its portfolio in its three core therapeutic areas of oncology, cardiovascular/metabolic disease, and respiratory, inflammation and autoimmune diseases.Government outsourcing group Capita has been awarded the contracts to operate London's congestion charge, low-emission zone and traffic enforcement schemes. The combined contract is expected to be generate revenue of around £145m for Capita, which helped set up and operate the original scheme in 2003 but was fined for missing targets and lost the contract in 2009. Housebuilding firm Barratt Developments reported a robust set of half-year results, helped by the continued recovery of the housing market across all regions, adding that it is well placed for 2014 and beyond. Net private reservations per active site rose 37%, while total completions increased 19%.Estate agent chain Countrywide forecast annual results at the top end of hopes after boosting income by 25% in the last three months of 2013. Countrywide, which runs brands such as Bairstow Eves, Bridgfords and Hamptons, said total income in the three months to December 31st lifted a quarter to £171m, boosting annual income by 11% to £584.8m.Asos has unveiled a 36.8% increase in sales for the last four months, slightly ahead of analysts' forecasts. NR