London pre-open: Stocks seen weaker as PM set to be announced

London stocks were set to slump at the open on Monday following heavy losses in the US at the end of last week, as investors mull news that Russia is suspending gas deliveries via the Nord Stream 1 pipeline indefinitely.

The FTSE 100 was called to open 70 points lower at 7,211.

CMC Markets analyst Michael Hewson said: "The late day reversal in US markets didn’t appear to have any obvious catalyst, although the reports that Russia was suspending gas deliveries via the Nord Stream 1 pipeline indefinitely could have played a part, given that the announcement came after the European close on Friday.

"This late US weakness looks set to translate into a sharply lower European open as we look ahead to a big week for the European Central Bank, as they look to navigate a way through a crisis that could put the finances, as well as the borrowing costs of some of the weaker members of the currency bloc under huge strain.

"Russia’s actions on Friday in indefinitely closing the pipeline could also see renewed upward pressure on European and UK natural gas prices when markets reopen today, after seeing big falls in prices last week as UK natural gas prices fell 39%, while European prices fell 33%."

On home shores, the new UK prime minister is expected to be announced around 1230 BST, with Liz Truss and Rishi Sunak in the running.

In corporate news, housebuilder Vistry said it has agreed to buy Countryside Partnerships in a £1.25bn deal.

Under the terms of the acquisition, Vistry will pay 0.255 of a new Vistry share and 60p per share in cash.

Elsewhere, veterinary pharmaceuticals group Dechra said both revenues and profits had risen throughout the twelve months ended 30 June.

Dechra said revenues had grown 13.8% to £681.8m, while underlying operating profits were up 9.4% at £174.3m and underlying earnings were 9.2% stronger at £190.6m amid "strong organic growth" in all key markets and across all therapeutic segments.

Drugmaker AstraZeneca said its biliary tract cancer treatment had been granted US approval to be used as the first immunotherapy regimen for patients with the disease.

AstraZeneca said the approval of Imfinzi for usage in the US was based on the results of the TOPAZ-1 Phase III trial, in conjunction with chemotherapy, which showed the drug reduced the risk of death by 20% versus chemotherapy alone.