Markets Overview: (Source: Bloomberg, FT, Reuters, DJ Newswires)

The UK 100 is set to open down 27pts at 6573pts after closing unchanged for yesterday’s session, although this doesn’t tell the full story.

The UK 100 at one stage was trading almost +50pts at around 6645pts, buoyed by the likes of Standard Life (SL.L) up 7% after agreeing to buy Ignis Asset Management for £390m. Investors welcomed the expansion and the funds under management, new customers and future cost savings that come with it.

Royal & Sun Alliance (RSA.L) pitched in with a near 4% gain after implementing their 3 for 8 rights issue, raising £773m in the process. Market chatter of an additional inflow of £84m from the sale of the company’s Lithuanian unit helped nudge shares higher.

William Hill (WMH.L) put on 2.8% after receiving a vote of confidence from analysts at Nomura, Goldman Sachs and Investec who all issued buy ratings on the stock. Having seen the share price fall some 14% in a week since George Osborne announced tax on gaming machines would increase, investors took the opportunity to pounce on a rare piece of good news.

Dredging the UK 100 index was Lloyds Banking Group (LLOY.L) after UK Financial Investments (UKFI – the body that manages the government’s stakes in LLOY and RBS) announced it sold a further 7.5% stake in Lloyds at 75.5p. The knee-jerk reaction of investors was to sell, perhaps not understanding the discounted price the government ‘suffered’. In short, to get away £4.2bn worth of stock, a deal would typically be negotiated – a 4 to 5% discount on a 7.5% stake should mathematically have little impact overall.

US Markets fell after President Barack Obama warned the crisis in the Ukraine may escalate and five banks failed Federal Reserve stress tests.

President Obama threatened further and harder-hitting sanctions on Russia if they did not cool the situation in Ukraine after reports of Russia conducting military exercises near the border.

Citigroup (C) fell 5.4% after failing stress tests designed to challenge a banks’ ability to deal with a financial crisis. US units of Royal Bank of Scotland, HSBC, Banco Santander and Zions Bancorporation also failed.

As a result the Dow Jones declined 99pts to 16,268pts, wiping out the previous day’s gains, this coincided with profit taking in Europe and lead to the UK Index eroding the near 50pt intraday gain.

Asia trading proved somewhat indecisive with shallow gains or losses registered across the board. Hang Seng closed 0.23% lower, India’s Sensex 30 finishing higher by 0.49% as trader adopted a ‘wait and see’ approach regarding the situation in Russia/Ukraine before committing to buying or selling.

Results: Thomas Cook (TCG.L) Overall bookings + 2%, margins should improve more than average selling prices, 50% of 2014 summer holidays sold. Gulf Keystone Petroleum (GKP.L) Loss after tax of $32m, increasing Shaikan production capacity to 40,000 bopd by end of Q4, cash and liquid investments at $82m, sees 66,000 bopd by 2016 before progressing to medium-term target of 100,000 bopd. Compass (CPG.L) H1 revenue + 4%, sees H1 operating margin growth of 10 bps, if current spot rates continue, it sees a 6.2% or £78m impact of 2013 FY underlying profit.

In focus today: UK Retail Sales at 9:30, US Initial/continuing jobless claims, FOMC Pianalto, GDP at 12:30, US Pending Homes sales at 15:00, JPY National CPI @ 23:30, Unemployment rate, retail trade, household spending at 23:30.

Commodities: Copper rises to $6,554 on speculation that some hedge funds were buying back the metal after betting on a price drop. WTI Crude near a one week high of $100.36 a barrel while Brent edged lower to $106.97 as crude stockpiles fell at the main US Storage Hub. Gold at $1,303 down $0,50 after light trading in Asia.

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Overnight Macro Data: (Source: Reuters/DJ Newswires)

• AUSSIE             House Affordability                 WORSE
• CHINA              Industrial Profits YTD              WORSE

See Live Macro calendar for all details

UK Company Headlines: (Source: Reuters/DJ Newswires)

• Regulators refer UK energy retail sector to competition watchdog
• London Stock Exchange sees 91 percent leap in capital raised
• Babcock acquires Avincis for 920 million stg
• Afren full year profit falls 44 pct
• Rangers FC reports first half loss in 2013-14
• Compass sees H1 revenue growth of about 4 pct
• JKX Oil & Gas says operations in Russia, Ukraine continue without disruption
• Serco group awarded interim northern rail franchise agreement
• Eurasia Drilling says weaker rouble, Rosneft exit to hit 2014 sales
• Daily Mail says group outlook for year unchanged
• Westmount Energy appoints new chairman
• Gulf Keystone Petroleum full-year loss after tax narrows
• RPC group FY trading performance to be in line with management expectations
• Thomas Cook sees pick up in summer bookings
• Hilton Food FY revenue rises 9.1 pct
• Laura Ashley says pretax profit up 2 pct to 20.5 million STG
• Babcock to acquire Avincis for 920 mln stg
• Stock spirits FY revenue rises 16.4 pct to 340.5 mln euros