Date: Wednesday 31 Dec 2014
LONDON (ShareCast) - Fears about a slowdown in China resurfaced on Wednesday, but UK stocks were still expected to rise on a shortened session following a sell-off the day before.
City sources predict the FTSE 100 will open 23 points higher than Tuesday's close of 6,547.
The index dropped 1.3% the previous session, snapping an eight-day winning streak, as uncertainty surrounding the future of Greek politics and ongoing fall in the oil prices weighed on stocks.
Market sentiment is likely to be dampened further by the confirmation that manufacturing activity in China declined in December for the first time in seven months.
The final reading of the HSBC China manufacturing purchasing managers' index (PMI) was revised up to 49.6 from the initial estimate of 49.5, but still remained below the break-even mark of 50 which it reached in November.
The Chinese government's own manufacturing PMI is due out overnight and is forecast to drop to 50 from 50.3 in November.
Trading volumes are expected to be low on Wednesday with a number of markets finishing early and some already closed for the New Year break. Trading on the London Stock Exchange will end at 12:30, while markets in Japan, Germany and Italy are closed.
Stocks to watch
Shopping centre developer Capital & Regional (C&R) is set to benefit from tax breaks after converting to a real estate investment trust (REIT). C&R said it had converted to a REIT with immediate effect from Wednesday following a resolution passed at the company's general meeting on 2 December which amended its articles of association. The REIT regime enables C&R to benefit from a zero corporation tax rate on qualifying property income and capital gains.
Business communications supplier Daisy Group, which is being taking over by a private equity consortium, posted narrower half-year losses, but said revenue had fallen.
51.40p
