Britain's FTSE 100 <.FTSE> index is seen opening down 47-54 points, or 1.0 percent on Monday, according to financial bookmakers, extending last week's falls in tandem with weakness in Asia as North Korean state television said the country's leader Kim Jong-il had died, sparking fears of regional instability.
Investors were also rattled by Fitch's warning that it may downgrade France and six other euro zone countries as it believes a comprehensive solution to the region's debt crisis is technically and politically beyond reach.
The UK blue chip index closed 13.51 points, or 0.3 percent lower on Friday at 5,387.34 after giving away gains in late trading, with profit taking on defensive stocks more than offsetting a rally among miners and energy shares.
U.S. blue chips <.DJI> also saw a choppy session on Friday, ending flat as earlier gains were erased, unsettled by the Fitch warning on the euro zone.
In Asia on Monday, MSCI's broadest index of Asia Pacific shares outside Japan <.MIAPJ0000PUS> shed 2.4 percent, while South Korea's benchmark index <.KS11> was down 3.4 percent after news of the death of North Korea leader Kim Jong-il.
South Korea, still technically at war with the North, placed its troops and all government workers on emergency alert, but Seoul's Defence Ministry said there were no signs of any unusual North Korean troop movements.
Financial markets fear instability in northeast Asia because of the unpredictability of a leadership transition in impoverished, secretive North Korea.
Commodities also fell broadly, as investors reacted by shedding riskier assets in favour of the safe-haven dollar.
No important British data will be released on Monday, with the main domestic focus for this final, foreshortened trading week before Christmas to be the release of minutes from the December Bank of England MPC meeting on Wednesday, and the final reading for third-quarter GDP on Thursday.
Across the Atlantic, the final reading for third-quarter U.S. GDP will also be released on Thursday, the highlight of a raft of U.S. data due this week, although the only U.S. pointer due on Monday will be December's NAHB index, due at 3:00 p.m.
Traders regarded bond auctions in Greece and Spain on December 20 as the last key events to watch before the Christmas break.
As we approach the end of the year, traders have to watch for low volume and volatile reversals triggered by window-dressing. Fund managers may decide to run the market in both directions to dump poorly performing stocks and to buy up low-priced equities. This could cause a choppy, two-sided trade, said James A. Hyerczyk, analyst at Autochartist.
The latest quarterly changes take effect for the FTSE 100 index from the open on Monday, with Russian miners Evraz