LONDON (ShareCast) - A slight drop is being predicted for London's blue chips, with a generally mixed picture anticipated for Europe as a whole.
City sources predict the FTSE 100 will open around 10 points lower than yesterday's close of 6,563.65, ahead of what is expected to be another relatively quiet session.

Alpari UK market analyst Craig Erlam said: "Things don't really pick up until Wednesday when we'll get the minutes from the September Fed meeting which could provide further insight into the timing of the first rate hike, with markets still pricing it in for the middle of next year despite the fact that the economic data continues to remain strong and support earlier action from the central bank."

He attributed Monday's cautious trading to anticipation of the meeting, but expects Tuesday's session will be "a little better", despite the lack of direction from Asian markets overnight.

Tuesday's session will see the release of the Bank of England's (BoE) credit conditions survey, data on industrial output and gross domestic product (GDP) estimates.

The report on UK industrial production is forecast to show a 2.6% increase in August while another is expected to reveal UK manufacturing output gained 3.4% the same month.

The NIESR estimate for GDP are expected to reveal a fairly good number, with Erlam predicting that markets would be "happy enough" with a predication above 0.5%.

In company news, British-Australian diversified resources group Rio Tinto has revealed that it had turned down the advances of Glencore after an approach from the mining and commodities giant in the summer. The deal would have created the biggest mining company in the world with a market value estimated to be $160bn, surpassing that of BHP Billiton ($154bn).

Carillion has landed a £75m contract for the development of the the first phase of the development of the Dubai World Trade Centre. It will use funds provided by the UK government's new Direct Lending Facility, of which Carillion is the first company to benefit. The facility is being provided by UK Export Finance (UKEF) to boost UK exports.

Ukraine-focused iron ore producer Ferrexpo said it is looking to scale back on investment in the face of low commodity prices. "In the current low-priced iron-ore market environment new growth capital expenditure will be reduced and will focus on high return quick payback projects in order to maintain the strength of the balance sheet," the company said.

Lower demand in the US and China has hit telecoms testing group Spirent, which warned that revenues and profits in the third and fourth quarters would be lower than previously guided.

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