London pre-open: Weak start expected ahead of shortened session

(Sharecast News) - UK stocks are expected to fall again on Tuesday, taking their lead from a sell-off on Wall Street overnight and a weak performance on Asian indices, with very little corporate or economic news to provide a catalyst for markets on the final trading day of the year. The FTSE 100 is tipped to open around 20 points (-0.25%) lower than Monday's close of 8,121.01, in what is set to be a shortened session with the London Stock Exchange closing up shop at 1230 GMT. Most major markets across Europe will also be operating a half-day on Tuesday.

New York's three main indices all closed with losses of 1% or more on Monday, with the eagerly awaited Santa Claus rally no where to be seen as investors scaling back risk appetite and locking in gains ahead of the year-end. Stocks in Tokyo and Shanghai also closed with heavy losses overnight, while Hong Kong finished flat.

"Trading volumes were light, and no doubt this contributed to overall weakness," said David Morrison, senior market analyst at Trade Nation. "European stock indices were mixed in early trade this morning in quiet, low volume trade. There was relatively little activity in FX markets too."

The economic data calendar for Tuesday is relatively light, though leading indicators from China out overnight were making headlines. The NBS non-manufacturing PMI rose to 52.2 from 50.0, well ahead of the 50.2 consensus estimate, while the manufacturing PMI fell to 50.1 from 50.3, slightly short of the 50.3 expected.

Later in the US session, investors will be watching the S&P/Case-Shiller home price indices and the Federal Housing Finance Agency's housing price index for October.

In UK corporate news, logistics firm Bunzl said it would start the first tranche of its £200m 2025 share buyback programme on January 2. The company will buy £50m in shares by March 3 when it releases its annual results.