LONDON (Alliance News) - UK equities are called to open lower Monday, taking cues from their Asian counterparts, amid a lack of UK macro-economic data scheduled for the trading session.
Asian stocks have dropped sharply overnight, with the Nikkei in Tokyo closing down 0.2%, and the Hang Seng and Shanghai Composite index both trading down more than 1%.
Sentiment was knocked after reports that some Chinese banks have started to reduce their loans to the property sector.
The news followed a report from the National Bureau of Statistics that revealed that residential property prices in major Chinese cities increased in January, but at a weaker pace than in December. In January, new home prices advanced 15% annually in Beijing, and grew 18% in Shanghai. On a monthly basis, prices moved up 0.4% and 0.5% respectively in Beijing and Shanghai. Overall, house prices in Chinese cities grew by 9.6% in January, year-on-year, which is down from 9.9% growth in December.
Also weighing on early sentiment in London, US stocks closed lower on Friday with Wall Street giving up early gains. The DJIA, NASDAQ Composite and S&P 500 all closed between 0.1% and 0.2% lower.
Both CMC Markets and IG indicate the FTSE 100 to open lower at approximately 6,817 points Monday, having closed at 6,838.06 on Friday.
Markets appear to be ignoring news over the weekend that finance ministers from the world's top 20 economies meeting in Sydney agreed to measures that they said could add 2% to global growth over the next five years.
In a relatively quiet data calendar, German IFO business survey numbers are released at 0900 GMT.
"Last week's German 'flash' manufacturing PMI for February was weaker-than-expected and lower than in January," says Rhys Herbert, senior international macroeconomist at Lloyds Bank. However, "while that indicator and the IFO usually move together over the medium term, the short-term correlation is not always as tight."
The final EU consumer price inflation readings for January are scheduled for 1000 GMT. The data is expected to show a rise of 0.7% year-on-year, and a decline of 0.4% month-on-month.
"This will only add to concerns about the risk of deflation in the euro area, in advance of Friday?s initial estimate for February," says Herbert.
In the afternoon, the Chicago Federal Reserve releases its national activity index at 1330 GMT. US Markit services PMI is released at 1358 GMT, with the Dallas Fed publishing the Texas manufacturing outlook survey at 1530 GMT.
In corporate news, UK blue-chip distribution and outsourcing company Bunzl and FTSE 250-constituents Bovis Homes and Hiscox have released full-year results for 2013, while Associated British Foods has released a trading statement.
HSBC Holdings, the FTSE 100's largest company by market capitalization, releases its full-year results at 0815 GMT.
Meanwhile, UBS has upgraded its price target for a host of transportation companies. It has lifted Stagecoach Group's price target to 365.00 pence from 340.00p, National Express Group's to 330.00p from 300.00p, FirstGroup's 135.00p from 120.00p, and Go-Ahead Group's to 2,150.00p from 1,700.00p. It also has upgraded Go-Ahead to Neutral from Sell.
By James Kemp; jameskemp@alliancenews.com; @jamespkemp
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