The FTSE 100 index is seen opening as much as 37 points, or 0.7 percent lower on Friday, according to financial bookmakers, tracking sharp falls on Wall Street and in Asia as the initial news from a crucial EU summit proves disappointing.

European leaders failed to agree on a treaty change and decided to cap the euro zone's permanent bailout fund, with the fund also not to get a banking licence that could have increased its firepower.

The UK blue chip index closed down 63.14 points, or 1.1 percent on Thursday at 5,483.77, its lowest close in more than a week, having endured another choppy session.

Sentiment was hurt on Thursday when European Central Bank President Mario Draghi cooled market expectations about the prospect of an acceleration in ECB bond purchasing, although the bank did cut interest rates by 25 basis points to 1 percent.

The size of last week's rally may have also played a role in yesterday's decline as it looks like it may have been a case of too much, too soon. Based on current levels of volatility, it is just too risky to play the long side of the market after last week's lofty gains, James Hyerczyk, analyst at Autochartist, said.

U.S. blue chips dropped 1.6 percent on Thursday, while MSCI's broadest index of Asia Pacific shares outside Japan shed 2.5 percent, and Japan's Nikkei stock average lost 1.5 percent on Friday.

Miners are likely to be among the worst blue chip performers in London as copper futures edged lower in Asian trade on Friday, reflecting investor worries about European leaders finding a far-reaching solution to the two-year-old debt crisis, and sharply slowing demand in top metals consumer China.

China's annual inflation rate slid to 4.2 percent in November, the lowest level in more than a year, fuelling expectations of further monetary policy easing to combat deteriorating domestic and international economic conditions.

A much steeper fall in producer inflation to 2.7 percent in November from 5.0 percent in October showed the Chinese economy cooling off rapidly.

On the domestic data front, British wholesale inflation numbers will be released at 0930 GMT, with PPI input seen up 0.2 percent in November, and PPI output ahead 0.1 percent, after being -0.8 and flat, respectively, in the previous month.

British trade figures will also be released at 0930 GMT, with a global trade deficit of -9.40 billion pounds forecast for October, down from -9.814 billion pounds in the previous month, and the non-EU trade balance is seen at -5.50 billion pounds in October, down from -5.715 billion pounds in September.

U.S. international trade numbers will be released at 1330 GMT, with a deficit of -$43.5 billion forecast for October, up from -$43.11 billion in the previous month.

And the preliminary December Reuters/University of Michigan consumer confidence survey will be released at 1455 GMT, with a reading of 65.5 forecast, up from 64.1 in November.

UK stocks to watch on Friday are:

RIO TINTO

Rio Tinto may use trucks to export iron ore from its Simandou project in Guinea before a 2015 target, CEO Tom Albanese told Reuters on Thursday.

TULLOW OIL

The British oil firm said on Thursday it hoped production from its Jubilee oil field in Ghana would reach 120,000 barrels per day by early next year, narrowing the possible timing of a target delayed twice already.

ASSOCIATED BRITISH FOODS

The food producer holds its annual general meeting.

BELLWAY

The housebuilder issues a trading update.

M J GLEESON GROUP

The urban regeneration specialist holds its annual general meeting.

LOK'N STORE GROUP

The self storage firm holds its annual general meeting.

CSCAPE GROUP

The web designer and intranet group holds its annual general meeting.

(Editing by David Cowell)