London pre-open: Sharp gains expected in HSBC

The news-flow surrounding corporate activity and M&A is front and centre before the opening bell.

HSBC is expected to be the standout gainer on the top-flight index at the start of trading. That follows a report in The Times that the lender might spin-off its UK operations. In parallel, according to the Financial Times Britain's outgoing government has told BP it wants the company to remain a British industrial champion and it would oppose any takeover of the oil producer.

Hong Kong listed shares of HSBC were rising by 4.88% to $77.4 HK as of 07:45.

Acting as a backdrop, “Greek officials will hold a teleconference with the Brussels group today before meeting in person on Wednesday. Hopefully some real progress can be made during these discussions because at the moment, we appear to be counting down the weeks until Greece defaults and yet an agreement on reforms doesn’t even appear close,” Craig Erlam, Senior Market Analyst at Oanda points out.

To take note of as well, reports citing Market News International claim the People´s Bank of China is open to considering further stimulus measures, including quantitative easing.

Stocks to watch

An investigation at Diageo's 54.78%-owned Indian arm United Spirits (USL) has led it to demand the resignation of the business's chairman Vijay Mallya, though the 'liquor King of India' has refused. The internal inquiry, led by Pricewaterhousecoopers, conducted into loans given by USL to numerous Mallya's group companies found “various improprieties and legal violations”, leading to the board of USL stating on Saturday that it had lost confidence in Mallya continuing in his role as a director.

British Gas owner Centrica continues to trade in line with the guidance provided at the time of its 2014 Preliminary Results in February, with improved year-on-year profitability downstream expected to be more than offset by the impact of lower commodity prices on the upstream business.

Royal Bank of Scotland has sold another portfolio of loan commitments to Japanese lender Mizuho for a cash consideration of $500m. In the year ending 31 December 2014 the securities generated a profit aftertax of approximately $20m. Upon disposal the transaction will generate a loss, net of unamortised fees, of about $30m (£20m). The sale follows that announced on 26 February when RBS sold a protfolio of US and Canadian loan commitments.