London pre-open: Stocks seen lower as volumes taper off ahead of Christmas

Stocks in London were set drift lower at the open amid a lack of fresh catalysts, as activity winds down in the run-up to the Christmas break.

The FTSE 100 was called to open down 11 points from Tuesday’s close at 7,033.

CMC Markets’ Michael Hewson said: “Yesterday’s move in the FTSE100 to its highest levels since mid-October were primarily driven by a weak pound, a rebound in oil prices and a decent rally in the banking sector, which to all intents and purposes has had a decent year, despite concerns about the low interest rate environment.

“Much of this rebound in the banking sector has come in the last three to four months as it became apparent that the economy was doing pretty well and the Bank of England would be unable to cut rates any further, while the rise in inflation expectations started to push yields higher, and take the pressure off stressed balance sheets.”

On the data front, UK public finances and the Bank of England agents’ summary of business conditions are at 0930 GMT. In the US, existing home sales are at 1500 GMT.

In corporate news, FTSE 250-listed John Laing Infrastructure Fund is to buy a 6% minority stake in a rail project from John Laing Investments for £42.4m.

The acquisition of the Intercity Express programme phase one project will be financed from the fund’s revolving credit facility and is expected to complete in the new year.

Meggitt and QinetiQ confirmed that QinetiQ has acquired Meggitt Defence Systems and Meggitt Holdings Canada, together Meggitt Target Systems, from Meggitt for £57.5m on a cash-free, debt-free basis.

During the year to 31 December, Meggitt Target Systems generated £26.1m revenue and £4.9m EBITDA.

Meggitt said it has agreed with the trustee to pay £10.2m of the sale proceeds into the Meggitt Pension Plan to reduce the deficit.

Dairy Crest has agreed to set up a research partnership with Danisco Animal Nutrition, part of DuPont's Industrial Biosciences business.

Product development and trials carried out by this venture will look to test the efficacy of Dairy Crest's galacto-oligosaccharide 'GOS', prebiotic used in infant formula, for use in poultry and swine.

Riverstone Energy has offloaded a C$28m loan Canada's CIOC and swapped the proceeds for an investment in CIOC warrants instead.