London pre-open: Limited gains expected on FTSE

19th Sep 2012 07:29

City sources predict the FTSE 100 will open up 21 points from yesterday's close of 5,868, after the Bank of Japan also announced plans to ease monetary policy. Gains on the FTSE are forecast to be limited, however, as investors continue to hold serious concerns over the economic situation in Spain as they await a decision over whether it will decide to ask for a bailout or not. On Tuesday, a late rally which briefly looked like it might see the Footsie venture into positive territory for the first time all day was nipped in the bud right at the death. Equities had a dull but fretful day, which started with concerns over China becoming involved in a trade war with the US and a military war with Japan, and ended with investors partly comforted about developments in Spain, where this morning's government debt auction went about as well as could be expected.In the US, stocks generally declined somewhat, although the Dow Jones industrial average went in the opposite direction to most other US benchmarks, finishing the day with a small gain. Technology company Smiths Group saw top line growth across all of its divisions last year, as revenue broke through the three billion barrier. Revenue for the year ended July 31st rose 7%, or an underlying 5%, to £3,038m from £2,842m the year before, beating the £2,978m expected by the market. Headline profit before tax was also above market expectations, rising 7% to £554m from £517m the year before. The median forecast from the group of analysts following the stock was £451m. Statutory profit before tax dipped to £366m from £398m.International engineering firm AMEC is buying a stake in a Brazilian oil and gas company as it builds its presence in the largest deepwater market in the world. The agreement will mean AMEC acquires a 50% stake in Kromav Engenharia from its owner managers for $12.5m in cash. Kromav is a privately owned Brazilian offshore oil and gas and marine engineering company based in Rio de Janeiro.Striking workers at Lonmin's Marikana operations are to return to work on Thursday after a settlement was reached late on Tuesday night. The agreement includes a signing bonus of R2,000 and an average rise in wages of between 11% and 22% for all employees falling within the "Category 3-8" bargaining units, effective from 1st October 2012. This includes the previously agreed 9-10% rises for these employees due to come into effect in October 2012. It also addresses issues of promotion for some categories of workers as well as other allowances.