London pre-open: Stocks seen lower on Asian cues

London stocks are called to open lower on Monday following a volatile session in China ahead of the International Monetary Fund’s decision on whether to include the yuan in its basket of global currencies.

The FTSE 100 is expected to open 13 points lower than Friday’s close at 6,362.

“On Monday the offshore yuan opened at its lowest level in three months. The dollar is rising in line with expectations for a Fed rate hike but the yuan is pegged to the dollar. The result is that the offshore yuan is constantly weakening to the lowest extreme in its currency band. Having started at three month lows, the offshore yuan appreciated sharply on suspected government intervention in order to maintain stability before the IMF decision,” said Jasper Lawler, market analyst at CMC Markets.

On the data front, UK net consumer credit figures for October are due at 0930 GMT, while in the US, Chicago PMI and pending home sales are at 1445 GMT and 1500 GMT, respectively.

Aberdeen Asset Management hit by EM outflows

Full year underlying pre-tax profits an investment house Aberdeen Asset Management rose just a touch to £491m from £490m due to the slump in Asian and emerging market equities.

Revenues were up 5% to £1.17bn, while cash at the end of the year was £531m, down from £567m.

Chief executive Martin Gilbert said the weakness in equity markets “may have some way to run.”

However, he added that “the long term fundamental attractions of investing in these high growth economies remain compelling for patient investors”.

Legal action against BHP Billiton’s joint venture with Vale is expected to be launched today, after the two dams were breached at the beginning of the month.

The Fundão tailings dam and the Santarém water dam at the Samarco Mineração iron ore mine in Minas Gerais, Brazil were breached on 5 November, killing 13 people and leaving six people unaccounted for.

The company confirmed that the Brazilian Federal Government and state governments intend to commence legal proceedings against Samarco, Vale and BHP Billiton for clean-up costs and damages.