London pre-open: Slight drop expected on FTSE

13th Dec 2012 07:31

City sources predict the FTSE 100 will open down seven points from yesterday's close of 5,946, after Federal Reserve Chairman Ben Bernanke warned about the seriousness of the impending 'fiscal cliff'. The Fed announced that it would reinstate a policy of 'quantitative easing' "initially at a pace of $45bn per month". It said it would keep its range of interest rates near zero as long as the unemployment rate remains above 6.5%, near-term inflation stays below 2.5% and longer-term inflation expectations continue to be well anchored. However, in the subsequent press conference, Bernanke said: "We cannot offset the full impact of the fiscal cliff ? it's just too big." Nevertheless, he did add that he thought the 'cliff' would be averted. News due out on the UK economic front today includes the CBI industrial trends survey, while abroad we are expecting an ECB report, the US producer price index and US retail sales. MPC member Martin Weale is scheduled to speak at the New Zealand Government Economist's Network Annual Conference in Wellington at 02:00 on Friday. However, the text of his speech will be released at 16:00 today, Barclays Research is reminding its cients this morning. Acting as a backdrop today perhaps, some of the market commentary regarding the US fiscal cliff and the rhetoric coming out of Capitol Hill turned somewhat more negative late last night.In company news, Chris Finlayson, the Managing Director of BG Advance and an Executive Director, is to succeed Sir Frank Chapman as BG Group's Chief Executive Officer (CEO), the natural gas company announced on Thursday. Chapman, who has been suffering from very early stage myeloma, is to step down from the board at the end of 2012 and will continue to work as an advisor to Finlayson until his retirement in June 2013.FTSE 250-listed Egypt-focused gold mining company Centamin has suspended operations at its Sukari gold mine because diesel has stopped being supplied. In an official statement made by the company to the London Stock Exchange, Centamin stated that it had received a "retrospective claim" for LE403m (approximately $65m) from the Egyptian General Petroleum Corporation (EGPC) for diesel fuel supplied from December 2009 to January 2012. Bus and train group National Express said it is on target to deliver full year results in line with company expectations despite challenging conditions. UK Bus revenue increased 4% in the year-to-date while core revenue from non-concession passengers increased 2%.