London pre-open: Limited gains expected on FTSE ahead of BoE report

24th Jun 2014 07:40

London's blue chips look set move slightly higher early on, with direction limited after a mixed performance in both the States and Asia overnight. Ahead of the Bank of England's (BoE) latest inflation report due out later today, the FTSE 100 is expected to edge around 10 points above yesterday's closing level of 6,800.56.Joshua Mahony, a Market Analyst at Alpari, said: "Today's European session look to focus upon the BoE's UK inflation report hearings which have shown the markets time and time again that they can be the source of significant volatility. The discussion centres around projections for employment, growth and inflation, which has obviously linkages with the rate of change in monetary policy going forward. "Mark Carney has become increasingly hawkish in the weeks since last month's inflation report [...] The UK economy is the best performing of the major developed nations and that is likely to be the reason why there are grounds for optimism. However, with weaknesses still evident within the employment market and the housing starting to cool off, there are also clear reasons to hold off on interest rates for the time being." Also on the day's agenda is the latest German business climate figure, which will be all the more watched following unimpressive factory data from the largest economy in Europe yesterday. Attentions will also continue to be at least partially focused on developments in Iraq, where most recently the US Secretary of State, John Kerry, has pledged to provide "intense and sustained" support for both its government and civilians. Back in the UK, in this morning's company news Tullow Oil reported some promising results from its 50%-owned blocks 10BB and 13T in Northern Kenya. Toronto-listed partner Africa Oil reported that drilling at the Ngamia-2 well found up to 39 metres of net oil pay and 11 metres of net gas pay. The well has now been suspended for testing. Meanwhile, the Agete-1 well was tested at a flow rate of 500 barrels of oil per day.Housebuilding and construction firm Galliford Try has sealed a deal with Kent County Council on the £100m 'Excellent Homes for All' scheme. The company was announced as preferred bidder for the contract in December 2013, which has now reached financial close. Galliford will build around 240 homes providing supported living for vulnerable adults across Kent, as well as communal facilities. The company will also invest in the funding for the project and provide ongoing facilities maintenance and lifecycle management services.Specialist chemicals company Croda International said it expects second quarter pre-tax profits to be around 8% below its first quarter performance as the strong pound continues to weigh on earnings. The FTSE 250 firm said approximately £1.5m of the difference between the two quarters is due to the increase in the strength of sterling. It added that for the full-year, if sterling remains at current levels, the currency translation and transaction effects would reduce the £251.4m pre-tax profit reported in 2013 by approximately £19m.Oilfield services group Petrofac has enjoyed a good start to the year, taking more than $6bn of orders to swell its backlog to record levels, and confirming performance remains in line with previous guidance for the full year. The company claimed to have suffered no significant impact on its operations in Iraq from the recent military clashes in the north of the country, with its main operation south and east of Baghdad and representing less than 5% of the group's expected revenues for 2014.NR