London pre-open: Weak start expected as IMF cuts Chinese growth forecasts

29th May 2013 07:27

Following the triple-digit gains on the FTSE 100, another record close for the Dow Jones Industrial Average and a decent performance from Asian markets overnight, stocks are expected to decline sharply this morning on the back of concerns over China.Markets across the globe surged yesterday, bouncing back strongly from heavy losses last week on renewed hopes of continued monetary easing in Europe and Japan. Meanwhile, US consumer confidence came in at a five-year high and American home prices registered their biggest annual jump since 2006."Following the strong data, market focus has been drawn back to the possibility of reduced Federal Reserve monetary stimulus," said Financial Sales Trader Max Cohen from Spreadex."The rally in global markets overnight was driven by investors choosing to focus on the growth implications of strong US data, ignoring that it could add to speculation of the Federal Reserve scaling back its bond-buying programme."However, dampening sentiment this morning was the International Monetary Fund (IMF) which reduced its 2013 growth forecasts for China from 8.0% to 7.75%. The IMF cited a weak world economy and exports.City sources predict the FTSE 100 will open down 37 points from yesterday's close of 6,762, with miners likely to be under pressure owing to concerns over a slowdown in China. Company news was thin on the ground in London this morning though there were a few updates on the FTSE 250.Cobham, the defence and security technology group, has won a five-year contract extension in Papua New Guinea for its Fly-in Fly-out (FIFO) aviation services to transport workers to remote mines. The contract extension from Ok Tedi Mining, worth AUD$85m, will see Cobham run flights for over 800 passengers a week between the Tabubil mine site and other major centres, flying over half a million kilometres every year.EnQuest has agreed to acquire a 70% interest in and operatorship of the offshore Tunisian assets of PA Resources. The assets include 2.0m barrels of oil equivalent (mmboe) of net producing proven and probable oil reserves (2P) in the Zarat Field.Investment and financial planning firm Brewin Dolphin announced that profit for the six months to the end of March increased by a quarter and said it has made good progress in its growth strategy. The investment giant said adjusted pre-tax profit rose to 25.9% to £23.8m while total managed funds increased to £28.1bn at March 31st 2013 from £25.7bn the same time a year earlier.