London pre-open: Flat start seen to holiday-shortened session

Stocks in London appear set for a slightly lower start on Tuesday, with few traders left at their desks ahead of the Christmas break.

The Footsie is seen starting the holiday-shortened session two points lower to 7,621, with the pound drifting 0.08% lower to 1.29328 versus the US dollar alongside.

Commenting on the sentiment in markets, CMC Markets's David Madden said: "Yesterday, the European session was mixed as the FTSE 100 registered respectable gains, while mainland Europe underperformed. The Dow Jones posted a record close last night. The Chinese tariff story failed to spark any interest, possibly because many traders are already on holidays, and those whose are working, are content to sit on the fence.

"The pound took a knock yesterday as traders continued to lock in profits in the wake of the election rally. The fall in sterling needs to be put in the context of the huge rally it enjoyed between early-September and when the exit poll was announced on election night."

To take note of, overnight Chinese premier, Li Keqiang, met with his opposite numbers in Japan and South Korea, with the three pledging to work for a rapproachment between North Korea and the US.

Li reportedly also vowed that the People's Republic of China would continue to open up its economy.

No major economic releases were scheduled in the UK, US or euro area on Tuesday.

M&A alive and well right up until year-end

Heat treatment and thermal processing provider Bodycote has entered into an agreement to acquire Ellison Surface Technologies, it announced on Tuesday, to create one of the world's largest providers of thermal spray and engineered coating surface technology services to the aerospace industry. The FTSE 250 company said gross consideration for the acquisition would be $200m (£154m). When adjusted for tax benefits worth at least £30m, net consideration for the transaction would be about £170m, and the consideration would be settled using Bodycote's existing committed credit facilities.

Infrastructure investor John Laing Group has entered into an agreement to invest AUD 51.5m (£28m) in the East Rockingham Resource Recovery Facility in Perth, Australia, it announced on Monday. This FTSE 250 firm said the investment would take its total investment commitment in 2019 to approximately £185m. It said the utility scale, AUD 510.8m waste-to-energy plant would help to address Australia's rising waste management problem by diverting waste from landfill, and would also generate 28.96MW of renewable baseload energy to support Western Australia's electricity network.

TP ICAP announced the proposed acquisition of Louis Capital Markets and MidCap Partners, collectively ‘Louis Capital’, on Monday, which it described as a private brokerage group specialising in equities and fixed income, primarily based in Europe. The FTSE 250 company said Louis Capital operates in London and Paris, with other offices in New York, Hong Kong and Tel Aviv. It said initial consideration for the acquisition would be $21m (£16.22m) in cash, payable at completion, with deferred non-contingent consideration of $6m to be paid over two years.