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City sources predict the FTSE 100 will open eight points below Friday's close of 6,510.44.
 
Stocks to watch

Rexam has proposed the sale of the Pharmaceutical Devices and Prescription Retail Packaging divisions of its Healthcare business for $805m. The consumer packaging company said Montagu Private Equity has made a binding offer for the divisions. The transaction is subject to regulatory approval and is expected to be completed around mid-2104.

BBA Aviation has sold its APPH entities, a full-service landing gear and hydraulic sub-systems supplier, and announced it was considering a cash return to shareholders. The business, which had formed part of BBA's Aftermarket Services division, was sold for $128m, the $120.6m proceeds of which would be use to reduce the group's debt level.

Randgold Resources said it hit targets for 2013, boosted gold production to a new record level and expects output to rise over the next five years. Production for the quarter and year to December rose 20% and 15% respectively, in line with guidance.

In the Press

Energy companies have hit out at Ofgem after being ordered to hand over information on every single trade they have made for the past 10 years as part of a new annual competition audit. That amounts to millions of pieces of data and executives have questioned the timing of the regulator's 'unusual' request, which was made just before Christmas. Investigators from Ofgem, assisted by the Office of Fair Trading, have only four months to sift through the data before the audit is published in April. - The Times

The wettest January for 100 years in parts of southern England had shoppers scurrying to the coat rails, helping retailers avoid a washout last month. Retailers discounted throughout January, hitting margins but boosting sales by 8% compared with the same time last year, according to the BDO High Street Sales Tracker. The rise was flattered, however, by weak comparative figures in 2013 when snow disrupted trading. - The Times

The growing problems in the Chinese banking system could spill over into a wider financial crisis, one of the most respected analysts of China's lenders has warned. Charlene Chu, a former senior analyst at Fitch in Beijing and now the head of Asian research at Autonomous Research, said the rapid expansion of foreign-currency borrowing meant a crisis in China's financial system was becoming a bigger risk for international banks. - Daily Telegraph

Newspaper tips

ARM Holdings has had a rough time after Apple, one of its biggest customers, posted disappointing iPhone sales. House broker Goldman Sachs took ARM off its "conviction buy" list. But longer-term prospects look rosier, the Sunday Times's Danny Fortson said in his Inside the City column. Arm is eyeing new markets. US chip designer Applied Micro Circuits has announced plans to make ARM-based server chips. There isn't much to show yet but executives at Facebook have predicted Arm-based servers will be a quarter of the market in five years. This makes Goldman's prediction that ARM's cash returns could double by 2017 seem feasible.

Buy shares of Action Hotels, the Mail on Sunday's Midas column recommended. The company owns and manages budget and mid-market hotels in the Gulf, where that market is underserved. With economic growth of 4% a year on average predicted for the region until 2018, Action is in a market where demand is growing but supply is limited. It works in partnership with well-known brands such as Premier Inn to gain custom. The company's 1,004 rooms will rise to 2,500 by 2017. The management team is experienced and has lots of regional contacts.

Eckoh shares have gained 75% since Midas tipped them in July, the Mail on Sunday column said. The company helps companies such as National Rail and the NHS to handle consumer enquiries more efficiently and helps businesses take payments more securely. It announced two big contracts last month and three of its largest contracts have been renewed. Chief executive Nik Philpot is confident about growth. Hold if you have the shares already and consider buying at 35p if you have not done so, Midas said.

US close

Despite pulling off their intraday lows, US markets suffered steep falls on Friday on the back of ongoing concerns over emerging markets, weak corporate earnings and a batch of mixed economic data.

Meanwhile, renewed worries about deflation in the Eurozone were also weighing heavily on sentiment during the session after a surprise slowdown in consumer price growth in January.

The news prompted suggestions about a potential interest rate cut or extraordinary measures that could be employed by the European Central Bank at its policy meeting next week.

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