London pre-open: Stocks seen muted, Brexit remains in focus
London stocks looked set for a muted open on Monday as we kick off the last full week of trading of the year.
The FTSE 100 was called to open two points higher at 6,847.
London Capital Group analyst Jasper Lawler said: "After five consecutive weeks of loses, the prospects for the pound aren’t looking much better this week. All things Brexit will continue driving movement in the pound. With Theresa May under increasing pressure to end the Brexit deadlock, currency markets are only too aware that things could quickly spiral towards a no deal or even a general election.
"Suggestions of a second referendum are growing in volume as an increasing number of senior minister’s view this as the only way out of the current impasse, whilst avoiding a hard no deal Brexit. Theresa May is vocally against the idea. We would expect a second referendum to boost the pound, the fact that the pound remains on the back-foot shows this is not being priced in as a realistic possibility right now."
Housebuilders were likely to be in focus following the release of Rightmove's latest survey, which showed house prices fell 1.5% in December compared with a 1.7% drop the month before.
This marked the biggest fall over two consecutive months since 2012, as sellers try to attract buyers despite a combination of the Christmas slowdown, stretched affordability and political uncertainty.
On the year, house prices were up 0.7% versus a 0.2% decline in November.
Miles Shipside, Rightmove director and housing market analyst, said: "It’s usual for new-to-the - market sellers to price lower in the run-up to Christmas to tempt distracted buyers, so we should not read too much into the mere fact of two consecutive monthly falls .
"However, these falls have been larger than usual, making this the largest fall over two months for six years, showing that there are more than just seasonal forces at play. With stretched affordability limiting some people's ability to buy for the first time or trade up, a modest lowering of property prices combined with an increase in wage growth could help more of them to move and thus increase transaction numbers."
In corporate news, British energy supplier
The FTSE 100 was called to open two points higher at 6,847.
London Capital Group analyst Jasper Lawler said: "After 5 consecutive weeks of loses, the prospects for the pound aren’t looking much better this week. All things Brexit will continue driving movement in the pound. With Theresa May under increasing pressure to end the Brexit deadlock, currency markets are only too aware that things could quickly spiral towards a no deal or even a general election.
"Suggestions of a second referendum are growing in volume as an increasing number of senior minister’s view this as the only way out of the current impasse, whilst avoiding a hard no deal Brexit. Theresa May is vocally against the idea. We would expect a second referendum to boost the pound, the fact that the pound remains on the back-foot shows this is not being priced in as a realistic possibility right now."
Housebuilders were likely to be in focus following the release of Rightmove's latest survey showed house prices fell 1.5% in December compared with a 1.7% drop the month before. This marked the biggest fall over two consecutive months since 2012, as sellers try to attract buyers despite a combination of the Christmas slowdown, stretched affordability and political uncertainty.
On the year, house prices were up 0.7% versus a 0.2% decline in November.
Miles Shipside, Rightmove director and housing market analyst, said: "It’s usual for new-to-the - market sellers to price lower in the run-up to Christmas to tempt distracted buyers, so we should not read too much into the mere fact of two consecutive monthly falls .
"However, these falls have been larger than usual, making this the largest fall over two months for six years, showing that there are more than just seasonal forces at play. With stretched affordability limiting some people's ability to buy for the first time or trade up, a modest lowering of property prices combined with an increase in wage growth could help more of them to move and thus increase transaction numbers."
In corporate news, British energy supplier SSE pulled out of its planned merger with Innogy's Npower retail unit, saying the two companies could not agree on commercial terms.
"The transaction has been impacted by multiple factors including the performance of the respective businesses, clarity on the final level of the default tariff cap, changing energy market conditions and the associated implications of these for both the joint business plan and the market in which the business would be operating," SSE said.
"These implications meant the new company would have faced very challenging market conditions, particularly during the period when it would have incurred the bulk of the integration costs."
Chemicals group Croda International has wrapped up a deal to buy Denmark-based vaccine adjuvant specialist Brenntag Biosector for €72m.
Biosector, which is expected to be folded into the group by the end of the year, specialises in innovative aluminium and saponin-based adjuvants used in human and veterinary vaccines to increase their effectiveness.
Polymetal International has sold its 100% interest in Khakanja - Okhotsk Mining and Exploration Company - to a group of unrelated private Russian buyers for a total consideration of $30m in cash and assumed debt.
The company said the assets sold comprised the 600 Ktpa processing plant, other related infrastructure at Khakanja, and old stockpiles at Khakanja, Avlayakan and Ozernoye deposits, with current ore reserves of about 0.1 Moz of GE. It said the sale also included the advanced exploration properties of Kundumi and Mevachan.