UK stocks are set to open with a small decline this morning after Chinese data revealed a slowdown in new credit.
City sources predict the FTSE 100 will open around five points below yesterday's close of 6,583.76, with sentiment benefiting somewhat from a decent finish in the States last night.
Stronger-than-expected earnings from Citigroup and upbeat retail sales lifted US stocks on Monday, as sentiment recovered after a heavy sell-off last week.
Wall Street indices managed to close with decent gains by the end of trade, depute a slight sell-off in late afternoon.
Last night it was estimated by the Congressional Budget Office (CBO) that the US budget deficit will shrink by nearly a third this year, more than initially estimated.
The CBO said that the budget deficit will by $492bn in 2014, as long as the current laws that govern federal taxes and spending do not change.
This will be relative to 2.8% of estimated gross domestic product (GDP), less than the $680bn shortfall registered in 2013, which was equal to 4.1% of GDP.
Chinese new credit falls in March, money supply slows down
It was revealed overnight that a measure of new credit in China declined by almost a fifth in March, while the growth in money supply slowed to its lowest rate since 2001, figures from the People's Bank of China showed.
Aggregate financing fell at an annual rate of 19% to 2.07trn yuan last month, from 2.55trn yuan the year before. Nevertheless, this came in ahead of the 1.85trn expected by analysts.
Meanwhile, the year-on-year growth of money supply, or M2, slowed to 12.1%, down from 13.3% in February and under the 13% consensus forecast.
In this morning's UK-listed company news, mining group Rio Tinto said it started the new financial year strongly with record first-quarter iron ore production and shipments, though production eased when compared with the end of last year. Iron ore production reached 66.4m tonnes in the first three months of the year, a record for the first quarter and up 8% on the previous year. However, output was down 6% when compared with the fourth quarter of 2013.
Aggreko reported an "encouraging" start to the year with underlying revenues up 5% in the first three months. However, the temporary power generator said reported revenue, which includes the impact of currency movements, fell 4% amid weakness in emerging markets.
Drinks giant SABMiller reported revenue growth in the fourth quarter of its financial year despite challenging trading conditions across its markets. Fourth quarter net producer revenue grew by 2% and for the full year grew by 3%. Total beverage volumes grew by 2% for the year on an organic basis, with lager volumes up 1% and soft drinks volumes rising 5%.
Engineer GKN continues to battle mixed markets, with better commercial aerospace and light vehicle markets making up for a military aerospace sector in reverse. A 7% rise in group sales to £1.9bn was largely negated by 6% currency headwinds.