London pre-open: Stocks to drop after heavy falls in US, Asia

London stocks were set to drop at the open on Thursday following very heavy losses in the US and Asia.

The FTSE 100 was called to open 57 points lower at 6,905.

CMC Markets analyst David Madden said: "US markets finished in the red, tech stocks took the brunt of the sell-off. The Dow Jones and the S&P 500 have now lost all the gains that were racked up during the year.

"Amid the broad-based decline, there were some positive corporate stories. Tesla shares jumped in after-hours trading after the firm posted third-quarter earnings per share (EPS) of $2.90, which smashed the 19 cents loss per share that analysts were expecting. Microsoft and Ford both posted better-than-expected EPS too.

"Recently, European equity markets have been finding it difficult to hang on to any gains, and that suggests investment sentiment is still weak. Whenever there is a major sell-off, traders are always nervous about getting back into the market, and it appears that some dealers fear this wider negative move isn’t over. In light of the move in New York last night, it is no surprise that Asian markets suffered heavy losses, and dealers in Europe are likely to stay risk averse. "

In UK corporate news, Lloyds Banking Group reported flat underlying profits for the third quarter and revealed that chief financial officer George Culmer will retire next year.

Underlying profit of £2.07bn in the three months to 30 September came as total income increased 1% to £.69bn and net interest margin remained stable at 2.93%.

Polypipe said it was buying Manthorpe Building Products Holdings, which makes moulded and extruded plastic and metal products for the UK and Irish markets for £52m on a cash and debt free, normalised working capital basis.

The deal was expected to be EPS accretive and deliver returns in excess of the cost of capital in the first full financial year of ownership, Polypipe said.

BT Group announced the appointment of Philip Jansen as its new chief executive.

The FTSE 100 telecoms giant said he would join the company and be appointed to the board as an executive director on 1 January and, following a handover period, would take over from Gavin Patterson as chief executive on 1 February. Jansen was joining BT from payments services group Worldpay, where he would be stepping down as co-chief executive at the end of the year.