London pre-open: Stocks seen lower after disappointing China data

London stocks are set to open lower on the first trading day of 2016, taking their cue from a dismal session in Asia, where the Shanghai Composite fell nearly 7% after weak Chinese factory data.

London’s FTSE 100 is seen starting 74 points lower at 6,168.

The Caixin manufacturing PMI for December came in at 48.2, down from 48.6 in November and missing expectations for a rise to 48.9.

“China’s latest PMI data implies more stimulus may be required in 2016, “said Jasper Lawler, market analyst at CMC Markets.

“The surprise monthly drop in the Caixin report comes off the back of the official manufacturing PMI that saw factory activity shrink for the fifth month in December with a reading of 49.7, up slightly from November. A big swing factor for this coming year will be whether Beijing makes better use of its ability to stabilise the Chinese economy. The government has been walking a tightrope of growth stabilisation and economic reform. The way Chinese authorities lean in 2016 could determine whether market’s have a good year or not.”

Diageo completes sale of major wine interests

Diageo was ringing in 2016 on Monday with the completion of the sale of its major wine interests.

The FTSE 100 beverage multinational had previously announced its intention to sell the US-based Chateau and Estate Wines and the UK-based Percy Fox arm, to Treasury Wine Estates

In October, Diageo indicated the deal would be worth $552m, with net proceeds to the firm of £320m.

"Diageo's strategy to drive stronger, sustained performance through focus on our core portfolio and today's announcement is another element of that strategy in action", Diageo chief executive Ivan Menezes said at the time.

"With the completion of this transaction Diageo would have released £1bn from the sale of non-core assets since the start of the financial year."

Treasury Wine Estates is an Australia-based business, and was formed through a demerger from brewer Foster's Group in 2011.

RSA Insurance announced the completion of the sale of its business in Italy to ITAS Mutua.

Headquartered in Trento, Italy and founded in 1821, ITAS is the oldest mutual insurance company in Italy. It provides over 1.2m policies to almost 700,000 insured members and is represented by over 250 agents.