London pre-open: Stocks seen higher on positive US cues

London stocks looked set for a firmer open on Monday following a strong close in the US at the end of last week, with the S&P 500 and the Nasdaq setting new record closing highs, and the Dow just shy of the 20,000 mark.

The FTSE 100 was expected to open 25 points higher than Friday’s close at 7,235.

CMC Markets’ Michael Hewson said: “After a positive start to 2017 last week European markets are set to follow on from that this morning after another record close for US markets last week, in the wake of the US December payrolls report.

“While the headline figure for last week’s December non-farm payrolls was a little on the low side at 156k, the bigger than expected rise in wages to 2.9% from 2.6%, the fastest since 2011 while seeing bond markets sell-off eventually prompted US equity markets to push up to yet more record highs with the Dow coming up fractionally shy of the 20,000 level, while the S&P500 nudged above the 2,280 level for the first time.”

On the data front, Halifax house prices are at 0830 GMT.

In corporate news, the UK government announced on Monday that its stake in Lloyds Banking Group fell below 6% after it sold 700m shares late on Friday.

UK Financial Investments Limited, the government vehicle set up to control stakes in the banks bailed out during the credit crunch in 2008, now holds a 5.95% stake in Lloyds, down from 43% at its peak.

William Hill has warned that its a full-year operating profit for 2016 will be at the bottom end of its guided range due to unfavourable football and horseracing results in December. While it was good news for punters, the bookmaker said it meant gross win margins since mid-November were below expectations.

FTSE 250 oil and gas facility builder Petrofac has signed a contract worth about $600m with Salalah LPG SFZCO, a wholly-owned subsidiary of Oman Oil Facilities Development Company, to undertake the engineering, procurement and construction of its Salalah LPG extraction project in the southern part of Oman.

Under the terms of the 36-month contract, Petrofac's scope of work will include construction of the liquefied petroleum gas unit and associated facilities, including tie-ins to existing pipeline infrastructure, together with LPG storage and jetty facilities at the Port of Salalah.

Swiss Iron ore miner Ferrexpo, which has assets in Ukraine, achieved record sales volumes in 2016, but produced lower pellets as it focused on reducing its debt.

Last year the miner made record sales volumes of about 11.7m tonnes compared to 11.3m tonnes in 2015, due to “strong” demand for its pellets, while production for pellets fell to 11.2m tonnes from 11.7m tonnes.