London pre-open: FTSE to open lower amid Brexit worries

London’s FTSE 100 is expected to open 12 points lower on Friday as oil prices fell and as concerns on this month’s European Union referendum persisted.

Oil prices dropped after rising earlier this week on continued supply disruptions and government data showing a decrease in US weekly crude inventories.

At 0731 BST Brent crude fell 0.58% to $51.65 per barrel and West Texas Intermediate dipped 0.69% to $50.21 per barrel.

Meanwhile, uncertainty grew on Britain’s 23 June EU referendum as former London Mayor Boris Johnson tried to persuade voters to side with the Leave campaign in a televised debate on Thursday night. Johnson urged Britain to “take back control” and “prosper as never before” outside of the EU as he put forward his case alongside Conservative lawmaker Andrea Leadsom and Labour's Gisela Stuart.

On the opposing side were Nicola Sturgeon, the first minister of Scotland, Angela Eagle, a senior Labour Party politician, and Amber Rudd, Britain’s energy secretary.

With the referendum just around the corner, investors will continue monitor developments on Friday. Labour Party deputy leader Tom Watson and shadow cabinet colleagues are expected to warn in a report on Friday that leaving the EU would lead to an emergency budget, further cuts in public spending and tax rises.

In economic data, UK construction output figures are due at 0930 BST and the University of Michigan’s consumer confidence index will be released at 1500 BST.

In company news, J Sainsbury has announced it will appoint its chief financial officer John Rogers as chief executive of Home Retail Group on completion of its £1.4bn takeover. Rogers will replace John Walden, who is stepping down from the company. The takeover deal is expected to be completed in the third quarter.

BP and Det norske oljeselskap on Friday said they were creating of Aker BP ASA, an independent oil and gas company combining the assets and expertise from both companies' Norwegian exploration and production operations to form the largest Norwegian independent oil and gas producer. Under the terms of the proposed deal, Aker BP will be independently operated and listed on the Oslo Stock Exchange. It will be jointly owned by current Det norske shareholder Aker (40%), other Det norske shareholders (30%) and BP (30%). BP will also receive a cash payment of $140m plus positive working capital adjustments as part of the transaction

Grocery giant Tesco confirmed the proposed sale of its Kipa and Giraffe businesses on Friday, as it continues to slim down and focus on its core retail business. The FTSE 100 firm said it has agreed to sell its 95.5% controlling share in Turkish supermarket chain Kipa to Swiss retail group Migros.

In a separate transaction, Tesco confirmed it is also selling the Giraffe restaurant chain which it picked up in 2013, to Harry Ramsden’s owner Boparan Restaurants Holdings.