London pre-open: Stocks seen lower on weak US cues

London stocks were set for a weaker open on Thursday, taking their cue from a downbeat US session, with volumes expected to be light again due to the holidays.

The FTSE 100 was expected to start 26 points lower than Wednesday’s close at 7,080.

Investors were digesting the latest figures from mortgage lender Nationwide, which showed that house prices rose more than expected in December. Annual house price growth was 4.5%, up from 4.4% the month before and beating expectations of 3.8% growth.

Nationwide said house prices are expected to rise about 2% next year, depending on the economy.

Robert Gardner, Nationwide's chief economist, said: “Looking ahead to 2017, house price prospects will depend crucially on developments in the wider economy, around which there is a greater degree of uncertainty than usual.

“Like most forecasters, including the Bank of England, we expect the UK economy to slow modestly next year, which is likely to result in less robust labour market conditions and modestly slower house price growth.

“But we continue to think a small gain - around two percent - is more likely than a decline over 2017 as a whole, since low interest rates are expected to help underpin demand while a shortage of homes on the market will continue to provide support for house prices.”

In corporate news, Globaltrans Investment said it has extended the long-term service contract with global iron ore and HBI producer Metalloinvest, for a further three-year period.

The London-listed firm said the key terms of the contract remain unchanged, and Globaltrans will continue servicing 100% of Metalloinvest's freight rail transportation needs.

Petra Diamonds published its payments to governments report for the year to 30 June on Thursday, with a total of $8.9m paid to governments under the reporting regulations.

The FTSE 250 firm paid $0.14m in corporate taxes in the Netherlands and $0.24m in Tanzania, while it spent $0.52m on mining and licence fees - also in Tanzania.

Royalties reached $1.47m in South Africa and $3.96m in Tanzania, while infrastructure improvement payments in those two countries were $0.75m and $0.49m respectively.

Indus Gas said it interim revenue grew and the company expects revenue to increase “substantially” once additional gas supplies start.

For the six months ended 31 September, adjusted revenue surged 21% to $27.39m, compared to the same period last year.