London pre-open: UK stocks to fall after weak GDP readings in France, Germany

14th Aug 2014 07:53

UK stocks are expected to open in negative territory on Thursday after some disappointing growth data from the Eurozone. City sources predict the FTSE 100 will open around eight points lower than Wednesday's close of 6,656.68.Michael Hewson, chief market analyst at CMC Markets UK, pointed out that markets have performed relatively well over recent sessions despite continuing weak economic figures from the single-currency region."Investors appear to be betting that the continued raft of disappointing economic data could compel the European Central Bank to take further steps to help try and boost economic activity before the end of the year," he said.He said that the pressure for further action from policymakers could become even greater after Thursday's data, which showed that both French and German gross domestic product (GDP) figures missed expectations.French GDP stagnated in the second quarter of 2014, missing the 0.1% growth expected by analysts, while German GDP shrank by 0.2%, worse than the 0.1% contraction predicted.Consensus forecasts are for the wider Eurozone to have grown by just 0.1% in the second quarter - data is due out later on Thursday morning - though the disappointing readings from the region's two largest economies now indicate downside risk to estimates.Stocks to watchEgyptian gold miner Centamin has unveiled a maiden interim dividend of 0.87 cents a share despite reporting a dip in profits in the second quarter as the cost of production rose. Chairman Josef El-Raghy said that with no further major expansion projects planned at Centamin's flagship Sukari project, he now sees "solid growth potential and a stable balance sheet". He added: "We now look forward to a sustained period of strong free cash flow generation".Construction group Carillion signalled that it may go hostile with its bid for rival Balfour Beatty on Thursday by revealing that it had held talks with several of Balfour's major shareholders. It said it had told them the merger could save at least £175m a year by the end of 2016, enhancing earnings from then.BC