London pre-open: Stocks seen lower amid Covid, Brexit worries

London stocks were set to fall further at the open on Tuesday amid ongoing concerns about the new coronavirus strain and stalled Brexit talks.

The FTSE 100 was called to open 36 points lower at 6,380, following heavy losses losses in the previous session.

CMC Markets analyst David Madden said: "The new health fears prompted several countries to halt flights from the UK as a way of trying to stop the spread of the new variant of the coronavirus. The French government took the harshest measures as they not only banned flights from Britain but also freight too. It was been confirmed that the new strain of the coronavirus has been identified in Austria, Denmark and the Netherlands, so therefore there is a risk that other countries have already been infected too. Yesterday the UK was given the cold shoulder but it is possible that other nations will be in line for the isolation treatment in the near-term.

"In recent weeks the negotiations between the UK and the EU have been dragging on and a deal has yet to be sorted out. The talks are still bubbling way in the background but in the short-term they might take a back seat to the fresh health fears.

"Sterling was a lot of volatility yesterday and it came under pressure in the morning as the new strain of the coronavirus and the lack of progress with respect to the UK-EU trade talks dented the currency. Prime Minister Johnson announced that he was making a plea with respect to fishing in a bid to broker a deal with the EU and that gave the pound a shot in the arm but the CMC GBP index still finished in the red. Differences still remain with respect to fishing."

In corporate news, building materials distributor Grafton Group has agreed to acquire Proline Architectural Hardware.

The FTSE 250 firm described Proline as a “leading distributor” of architectural ironmongery products for doors from a single location in Dublin. It said completion of the acquisition remained subject to approval by the Competition and Consumer Protection Commission in Ireland.

UK Commercial Property REIT has acquired an ASDA supermarket in Torquay, Devon from Aviva Investors for £16.6m, and agreed to forward fund the development of a purpose-built student accommodation asset at 41-45 Gilmore Place in central Edinburgh for £29.1m.

The company said the purchases would be funded through existing cash resources, with it having also disposed of the M8 Interlink Industrial Estate, Coatbridge for £25.4m.