London pre-open: Stocks to fall after solid month

London stocks were set to fall at the open on Monday at the end of what has been a solid month for equity markets.

The FTSE 100 was called to open 27 points lower at 6,340.

CMC Markets analyst David Madden said: "We are not out of the woods yet with respect to the coronavirus crisis but in the last few weeks there have been a seral major headlines with respect to big progress being made in the development of a vaccine. The health emergency is still a massive problem and this has been highlighted by the extension of restrictions in Germany and France.

"England’s lockdown ends this week but in light of the fact the nation will enter a tiered restrictions system, it’s as if the lockdown didn’t end for much of the country. If there is an absence of positive news from the pharma sector we might see stocks drift lower but even if we do, we probably won’t see aggressive selling for fear there will be further breakthroughs on the vaccine front."

Investors will be digesting the latest manufacturing data out of China. The manufacturing PMI rose to 52.1 in November from 51.4 the month before, marking the fastest of rate of expansion in three years.

Meanwhile, the services PMI reading came in at 56.4, ahead of consensus expectations of 56.0 and marking the best level of growth since 2012.

In corporate news, Frasers Group confirmed it had offered a £50m loan to Philip Green's Arcadia retail group, currently on the verge of collapse.

"The company can confirm that it has made an offer and provided draft terms to the Arcadia Group for a loan of up to £50 million and is now awaiting a substantive response," Frasers, owned by Mike Ashley, said in a statement.

It added that should efforts to agree an emergency funding package fail and Arcadia fell into administration, Frasers "would be interested in participating in any sale process".

Lloyds Banking Group has hired Charlie Nunn, HSBC's head of retail banking, as the FTSE 100 lender's next chief executive.

Nunn will replace António Horta-Osório at Lloyds when his contract at HSBC allows. He has a six-month notice period and up to six months of further restrictions. If he does not arrive before Horta-Osório leaves in June 2021, chief financial officer William Chalmers would become acting CEO.