London pre-open: FTSE to track modest recovery in China

That comes as Chinese markets experienced a modest lift following a significant decline the previous session, despite the latest inflation figure adding to concerns about the country's deflationary risk after falling to 1.4% in November against last year and 0.2% month-on-month.

Producer prices came in below predictions at -2.7%.

"Given that the PPI reading is seen as a leading indicator with any movements in price later being passed on to consumer prices, this would suggest there's plenty more disinflation to come in the Chinese economy yet," observed Alpari market analyst Craig Erlam.

In the UK, trade data is forecast to show the deficit narrowed in October to £2,400m from £2,838m the previous month.

Later in the US, the monthly budget statement for November will be unveiled along with mortgage applications for the week to 5 December.

"Today it looks as though markets are paring losses from earlier in the week but I don't sense a change in sentiment at this stage, which suggests to me the risk off sentiment could largely continue throughout the week," Erlam continued.

"As long as news-flow and speculation continues to view take the opinion that the glass is half empty, markets will continue to edge lower."

In company news, natural gas giant BG Group is to raise $5bn (£3.2bn) from the sale of a gas pipeline in Australia, which is planned to go towards reducing debt and future growth investments. BG is selling its wholly-owned subsidiary QCLNG Pipeline Pty to Sydney-listed, Australia's largest gas infrastructure business. It is making a pre-tax profit on disposal of $2.7bn, though this will be partly offset by a post-tax impairment of its remaining QCLNG assets, expected to be around $2bn.‏

High levels of disruption in the northern region of Africa and the devaluation of the Naira continued to affect sales at PZ Cussons, dragging half-year group operating profits 4% below the same period last year. The toiletries and beauty products manufacturer said the macro environment in Nigeria in the second half, which includes the February presidential elections and potential further currency volatility, "will be a key contributing factor to the overall result for the full year".