London pre-open: UK stocks expected to rise early on
In spite of the ongoing political uncertainty surrounding Greece after far-left anti-austerity party Syriza won the weekend’s election, UK stocks are expected to open higher on Tuesday.
City sources predict the FTSE 100 will open 10 points higher than Monday’s close of 6,852.40, with the index nearing its 2014 highs of around 6,900.
“So while Greek markets slipped back and bond yields shot up, elsewhere there appeared to be a belief that for all the rhetoric coming from Athens, that ultimately new Prime Minister Alex Tsipras and his coalition partners would ultimately be compelled to compromise in the coming weeks on their demands for an end to austerity and some debt relief,” said analyst Michael Hewson from CMC Markets.
The focus of Tuesday’s session would likely be on UK gross domestic product estimates for the fourth quarter which are expected to show that the economy expanded by 0.6% after 0.7% growth the preceding three months.
Stocks to watch
After two previous rejections, IAG has sweetened its offer for Aer Lingus to €2.55 per share, valuing the Dublin-based airline at €1.36bn. “The board of Aer Lingus has indicated to IAG that the financial terms of the proposal are at a level at which it would be willing to recommend to Aer Lingus shareholders,” IAG said in a statement.
Aerospace firm Meggitt will supply the cabin surveillance system for Embraer's E-Jets E2 in a deal worth $19m. The system is based on one developed by Securaplane to fulfil the latest aircraft security requirement.