Britain's FTSE 100 <.FTSE> index is seen opening down 6-9 points, or 0.2 percent on Thursday, according to financial bookmakers, extending Wednesday's sharp falls as the sell-off continued on Wall Street and in Asia on fears the euro zone crisis could be worsening, and after some disappointing data from China.
The UK blue chip index closed down 123.35 points, or 2.3 percent on Wednesday at 5,366.80, having rallied 1.2 percent on Tuesday, led by weakness in risk-sensitive commodity issues and banks, with concerns over the euro zone debt crisis ratcheted up as Italy's borrowing costs rose to a record high.
Worries over a possible sovereign credit rating downgrade for France were also revived, knocking the country's hard-pressed banks.
After the close on Wednesday, France's Credit Agricole
And after the U.S. close, Fitch downgraded its credit ratings for 5 European banks, including Credit Agricole.
U.S. blue chips <.DJI> ended 1.1 percent lower on Wednesday, at the level they were when London closed, having recovered a touch from heftier session lows.
In Asia on Thursday, MSCI's broadest index of Asia Pacific shares outside Japan <.MIAPJ0000PUS> was down 2.0 percent, while Japan's Nikkei shed 1.6 percent weighed by weaker-than-expected business sentiment as shown in the Bank of Japan's quarterly Tankan survey.
Hong Kong <.HSI> and Shanghai's <.SSEC> benchmark indexes were among the biggest losers in Asia after the release of HSBC's China flash PMI, the latest piece of data to show the world's second largest economy losing steam.
The private sector survey indicated that China's factory output will shrink again in December, adding to the headwinds facing a global economy struggling with sluggish U.S. growth and the euro zone sliding back into recession.
With concerns over global economic growth in the new year still very much front of mind it's difficult to see what might kick the bulls back into action, although as volumes inevitably start to thin out ahead of the Christmas break next week and with many stocks looking increasingly depressed, ideal conditions for something of a Santa rally may well be forming, said Terry Pratt, Institutional Trader at IG Markets.
On the domestic data front, British November retail sales will be released at 9:30 a.m., with a fall of -0.3 percent forecast, after a 0.6 percent rise in October, giving a year-on-year rise of 0.3 percent after a 0.9 percent increase in the previous month.
The CBI industrial trends-orders survey for December will be released at 11:00 a.m.
U.S. wholesale inflation numbers will be released at 1:30 p.m., with November producer prices seen up 0.2 percent on the month, after a fall of 0.3 percent in October, and the annualised rate seen unchanged at 5.9 percent.
The latest U.S. weekly jobless claims and December's Empire State index will also be released at 1:30 p.m., with November U.S. industrial output due at 2:15 p.m., and the December Philly Fed index scheduled for 3:00 p.m.
(Reporting by Jon Hopkins; Editing by David Cowell)