London open City sources predict FTSE 100 will open down 18 points from previous close of 5,254.
Stocks to Watch
Global information services company Experian saw improved performance across all its geographic regions except the UK & Ireland in the May to June period. Revenues grew 7% on a constant exchange rate basis while organic revenue growth was 6%.
Tullow Oil has found oil at its Nsoga-5 appraisal well, which is located in the Butiaba region of Uganda Block 2. The group said the well has successfully encountered 10 metres of net oil pay after it was drilled to a total depth of 587 metres.
Premier Oil has reported a rise in average production in the first six months of the year and said it has increasing visibility on longer-term production growth.
In the Press
BP is facing a ban on getting any new offshore licences to produce oil and gas in the US for a number of years. A house committee has passed a bill stopping any company from getting permission to drill for seven years if it has caused more than 10 deaths during operations, while contravening health and safety laws, says the Telegraph.
Institutional investors sent a warning yesterday to every company planning to float in London when they refused to overpay for Fairfield Energy shares, forcing its owners to scrap a Ł720 million flotation, writes the Times.
Glaxosmithkline's diabetes drug Avandia is safe enough to stay on the market, a panel of 33 medical experts decided last night at the conclusion of a contentious two-day hearing, reports the Independent.
Newspaper Tips
The London Stock Exchange has had a rocky ride recently, so much so that after moving back into the FTSE 100 index of blue chips stocks, it was booted off again in the June index review. Recent price changes have made the LSE more competitive, and compared to April, the exchange's share of trading of UK cash equities was up in June. Crucially, LSE also made gains on the competitive FTSE 100 market, with its share rising from 54.8 per cent in April to 57.4 per cent in last month. Given the undemanding valuation, the Independent is willing to stake its bets on further success. Buy.
As Burberry is currently trading at around 19 times 2011 earnings, with a fairly modest yield of 1.7pc, the Telegraph is shying away from bagging more of Burberry for now. But the group’s strong sales growth and argument that it is resilient to austerity measures – some people will always have room in their wardrobe for a new handbag, it seems – mean that if you have already bought in, Burberry is worth hanging on to. Northern Foods expects trading to remain challenging, which might be stating the obvious, but Northern says it is prepared for further squeezes on consumer spending, having already expanded the range of lower-value products it provides to Tesco, in particular. The shares sell on about seven times’ this year’s profits, which looks cheap given the yield. But uncertainties over that dividend will continue, says the Times.
US close
US stocks recovered their early losses but closed flat after disappointing retail sales figures and caution from the Fed.
Minutes from the last Federal Reserve meeting indicated the bankers talked about possible responses if the economy turned down sharply. The Fed also trimmed its growth forecast to 3.0% and 3.5% this year, down from 3.2% to 3.7%. Unemployment rate will range between 9.2% to 9.5% this year, the Fed added.
June retail sales disappointed but were not as bad as last month, dropping 0.5% due to a drop in sales of petrol and cars. Retailers, such as Home Depot and Loews, have fallen today.
Microchip manufacturer Intel posted earnings and revenue that beat analysts' expectations after the close last night. Net income was $2.89bn in the quarter ended June 26 against a loss of $398m last year. It also raised its forecast for the year.
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